A CP.ITIQU3 01 POLICIES POP PE CONSTRUCTING
INDIA'S RURAL ECONOMY

By
Jaswant Singh

A IHZSI3
Submitted to the School of Graduate Studies of Michigan
State College of Agriculture and Applied Science
in partial fulfillment of the requirements
for the degree of
DOC SDR OP PHILO X P H Y

Department of Economics

19l*S

CONTEiTTS
Page
LIST OP TABLES

iii

PREFACE

iv

Chapter

I.

Introductory:

II*

The Background

III.
17.
7.
71.

The Problem:

Purpose, Method and Scope

1
11

Weaknessesof the Rural Econony

33

Attenpted Economic Reforms

M-S

Need

6S

for New Approach

Criteria of Good Policy

85

711.

Education policy

95

71II.

Population Policy

117

IX.

Industrial Policy

139

Land Policy

l60

Finance Policy

192

Summary and Conclusions

213

X.
XI.
XII.

BIBLIOGRAPHY

223

LIST OP TABLES
Table
X
II
III

IV
V
VI

leading Agricultural and Mineral Products of India
Per Capita Income in Different Countries in Terms
of International Units (over the period 1925-3*0
Average Expectation of Life at Birth in selected
Countries
Birth and Death Bates in India (Per thousand Population)
Standard of Nourishment in India
Average Size of Farm Holdings in India (1931)

VII

RurA-Urban Population in India (Percentages of Total)

VIII

Per Capita Consumption of Cotton Piece Goods in Yards

(1929)
IX

Agricultural and Pastoral Occupation Distribution

(19^1)
X
XI

Average Density of Population of Selected Countries,
Per Square Mile
Density of Population in Different Provinces of India
(19^1) (Average population per Square Mile)

XII

Yields of Selected Crops in Different Countries,
1932-36 (quintals per Hectare)

XIII

Seller* s Expenses in Lyallpur Market per Rs* 100
of Sale

XIV
XV
XVI

Number of Bullocks in Relation to Area Cultivated
Progress Made by Cooperative Consolidation of Holding
Societies (Panjab)
Expend!tures on Rural Reconstruction Programs

(19l|0->+l)
XVII

XVIII

India's Working Population by Occupational Divisions,
19 Ul
Different Systems of Land Tenure in India

PREFACE
This study wss undertaken primarily with the purpose of
evaluating policies aimed at ameliorating the distressing poverty
prevailing in rural India,
The writer's contention is that most of the measures to
improve rural life have not "been successful in the past because they
either started from false premises or followed wrong methods.

In

the writer's judgment, any plan which does not remove the basic
causes of poverty is unlikely to succeed.

Furthermore, no program

can achieve significant and lasting results if it is not compatible
with the ideals of human freedom £tnd happiness.
Eistory bears ample evidence that despite apparent success,
the revolutionary and dictatorial methods actually fail to achieve
their putative objectives,

^or is a wholesale adoption of methods

successful elsewhere a guarantee that they will achieve similar suc­
cess in a country with a different hi story and culture*
Therefore, whatever reconstruction programs are adopted,
they must be related to the needs of the country end the ideals which
we cherish.

Before they are introduced on a country-wide scale they

must be carefully studied and tested.

Moreover, we must build our

economy with an eye to the future.

In the preparation of this study the writer has received much
help and guidance from Er. H. J. 'yngarden, head of the department of
economics, and Er. C. II. Hardin, professor of agricultural economics.
iv

Through personal discussions and valuable suggestions they have con­
siderably influenced the thinking of the writer and the development
of this thesis.

The writer is greatly indebted to professors D. C.

Cline end L. W. Witt for patiently going through the entire manu­
script and offering valuable criticism and suggestions.

He also

desires to an linowl edge the helpfulness of the entire faculty end
staff of the department of economics, as also of Er. C. F. Loomis and
Dr. J. A.

Becgle of the sociology end anthropology department, who

in various ways have been helpful in the preparation of this study.
He is particularly thankful to Mrs. Collinson for getting the manu­
script in final shape.

v

CHAPTER I
INTRODUCTORY*

PURPOSE, lEETECD AND SCOPE
Purpose

India was once rich and prosperous, possessing one of the finest
cultures and civilizations.^*

She was carrying on skilled agriculture at

a time when in their own unreclaimed mountains and morasses Europeans
still hunted the hear and the wolf*

p

It is well known that "before the

19th century the highest quality of textiles were produced in India and
the European manufacturers were in no way able to compete with them*”3
But today India suffers from grinding poverty.

Vith 90 per cent of her

people constantly, living in sight of hunger line,

h

her teeming millions

and poverty have become synonymous terms*"
This is a cause of concern not only to the people of India but
also to the people of the world*

In the contemporary world, where the

fortunes of one people are closely bound up with the fortunes of others,

*WijLl_Dur£nt, The Case for India, (New York:

Simon S-, Schuster, 1930),

P* *-5
Wolff, quoted by H. S. Chatterjee, Indian Economics, Part I (9th ed
Calcutta: E. Chatter jee, 193&?), p.“ ?6-----------^Paul IT. Sweezy, "An Economist’s View of India", Harvard Guardian, Vol. VII,
No. 1, Nov. l§hS, p. 3
---------------I4.
G. E. Jather £* S. G. Beri,_ Indlar Economics, (7th rev. ed., Madras*
Oxford University Press, IS**?), p. 69
^Vera Anstey, Economic Development of India, (3r<3- ed., London: Longman’s
Green & Co.,
p. 1---- -------------

1

2

through political and economic interdependence, the poverty of one
people is a standing source of danger to the peace and prosperity of
the rest of the wo rid* 6
It is therefore imperative that something he dsne with regard
to the appalling poverty that prevails in India.

Up till August, 19^+6

the Britishers, on account of their rule over the country, had to hear
the "brunt of the

blame,^

and with some justification perhaps.

But now

that the Britishers have gone, it is up to the people of India to lift
themselves from the slough of poverty in which they find themselves.
The leaders seem keenly conscious of the gravity of the problem.

They

are eager as well as impatient to raise their country to its tradition­
al pedestal of glory and prosperity.

This is a good sign.

But in their anxiety and impatience there lurks a danger.

Al­

though most of the great achievements in the history of mankind have
been the outcome of a "burning desire on the part of some men to achieve
something great, yet many of the evils from which mankind has suffered,
now and again, have had also their source in a similar enthusiasm to
achieve worthwhile ends.
To quote one example, freedom which today characterises the
American way of living is the outcome of unquenchable desire for liber­
ty on the port of the early pioneers.

They could not stand the tyran­

nies to which they were subjected in their home lands, and they staked
everything to find a place where everyone could be free to seek one's
material and spiritual salvation according to the dictates of one's
conscience.

However, it is also true that Hitler and Ku3solini, to

^J.C. Plugel, population, Psycholog;/ and Peace, (London: Watts & Co.,
19^7). p. 94
W.3. Tnompson, Danger Spots in World Population, (New York: A.A. Xnopf,

1930).
^Durant, op. clt., p. 2

3

name only two, have also "been animated by a burning desire to achieve
an order which in their Judgment would bring glory and prosperity to
their own countries.
So the fact that some people are fired by certain ideals is no
guarantee, that their plans woulc, in fact, achieve those ends.

While

it is very desirable to make use of the nobler aspirations and senti­
ments of the people to achieve worthwhile ends, yet it must not be for­
gotten that good Intentions alone, however powerful, cannot bring about
the realization of desirable ends.

Tery often the methods or the means

adopted have foiled good Intentions, and have aggravated the problem.
'.Whatever might have been the achievements of the Japanese
leaders who transformed their backward country into one of the leading
industrial and strong powers in the world, it cannot be said with any
confidence that either their own people or others thank them today for
these stupendous achievements.

Yet what Japan finally came to was the

inevitable consequence of the system which the Japanese leaders had
developed for the good of their country.
This disparity between ideals and actual results is not a
matter of chance.
efforts of man.

It is not the unkind fates refusing to bless the
It is the stern causality which does not appreciate

the pious intentions of men if they are stupid enough to use improper
means to desired ends.

In social life it is as much a matter of causal

necessity that bad means cannot yield good results, as it is in physical
world that a bad tree cannot yield good fruit.

Those who ignore the

logic of causation have to bear the nemesis when it comes, for come it
must.
V/hen the human effort fails in its purposes there can be two
reasons.

Either there is some confusion about the ends, or the means

4

chosen are improper— poorly conceived and "badly executed.

Generally,

however, it is easier to get a consensus about the ends, and these can
be more or less concisely formulated, at least when they refer to tan­
gible results,

Tor example, it may be generally agreed that one aim

of the people of India should be to remove poverty and raise the stand­
ard of living of the masses.

!Daere may be a considerable difference of

opinion as to what exactly constitutes the standard of living, yet with­
in quite narrow limits it is possible to get a consensus on that issue.
But as to the methods which may be followed to achieve that, it is not
so easy to get an agreement.

For whereas ends are few, the means ere

many.
This is the most tricky point in the situation.

Very often in

an anxietyto obtain immediate results, people give too little attention
to the consideration of means.

Any means are considered equally good,

and accepted by the overwhelming majority if they can be related to
the realization of the end in view.

This attitude, however, is unwar­

ranted, and it is here where lies the danger.

In human affairs the

means used are frequently as Important as tlie end.

For though in the

first instance it Is the end that determines the choice of means, yet
the means adopted may so transform human character that finally men may
become the slaves of means and forget the end, or a less desirable
ideal may take hold of their hearts.
Thus while there may be a general agreement about raising the
standard of living of the people, yet it may so hapoen that during the
process, the organisation of society is con^oletely changed.

And though

rise in per capita income becomes a realised fact, the sacrifices in­
volved may be so heavy and oppressive that the final result may prove
to be inimical to the happiness and prosperity of the people except a

email number who may be wielding the power*
Oils is apt to be forgotten at times of crises like the one
India is passing through Just now.

As the result of past frustrations

nnfl impatience to catch vp with lost time, the people are likely to be
swayed by a religious fervour to bring about their cherished millenium
in the shortest possible time* Any precedent in that direction, es­
pecially if little is known about the inside story, tends to heighten
their optimism and spur their active imagination.

Thus lured by the

ostensible success of other countries, the people of India may decide
to follow their methods forgetting two inportant considerations.

lirst-

ly, that history never quite repeats itself, and so what might have been
efficacious or possible in the past, may not work in the world of today*
Secondly, that what might have been possible in one country, in more
or less similar external circumstances, may not work with people having
different mores and history*
This is a real danger in India*

There is the possibility that

the people in their seal to recover the lost ground and bring India
abreast of other nations, may, forgetting the above two considerations,
accept programs which may not only fail to achieve their purpose, but
may on the contrary aggravate the situation.

VIth these considerations

in mind the present study has been undertaken*
The aim is to analyse the problems of the poverty of India, to
evaluate the programs that have been recently adopted as also those that
are being proposed, to examine in a dispassionate manner what foreign
plans and policies may or may not be adaptable to conditions in India,
and finally to suggest possible ways of approach consistent with general
welfare and commensurate with the ideals of human freedom and happiness*

Tor, whatever he the physical achievements of the economic plans, the
final test which they must meet lss

How far are they satisfying to the

aspirations and Ideals of the people for whom they are designed?
Method
Shis study involves four steps, vis. (a) analysis of the prob­
lem of poverty in India, (b) examination of the past and present pro­
grams to solve that problem, (c) formulation of criteria of good policy
consistent with ideals of human freedom and happiness, and (d) In the
light of the above criteria, and on the basis of experience in India as
well as other countries, to make suggestions as to what might be more
feasible and desirable in view of the peculiar situation in India*
As such the study is based on the use of the following three
methods:
Inductive Method:

This method haB been relied upon in the

study and analysis of the phenomenon of poverty in the country.
types of data have been available in this connection.

Two

A large number

of coag>etent scholars and observers both Indian and foreign (see Bibli­
ography) have made many studies of the problems of Indian economy.
Though India is a big country and conditions, naturally, must vary from
one part of the country to another, yet adequate sampling of studies is
available from which it is possible to make generalisations about the
whole country.

This is particularly so because of the fact that des­

pite the diversity of conditions, there runs an undercurrent of community
of interssts^ and difficulties, which enables us to make fairly scienti­
fic generalizations that, with minor exceptions, would apply to the
Tf.L. Brayne, The Indian and the Bngllsh Tillage (London, 1 9 3 3 ) P* 7

whole countr^ or at least to a major part of it*

The writer, besides

his intimate contact with rural life in the North where he has spent a
large part of hie life actually living with the tillers of the soil,
made a special study of the rural problem in about 50 villages^ in
different parts of the PanJab in 1935*36

connection with his disser­

tation for doctor of philosophy of the Panjab University, which how­
ever could not be completed on account of the changed plans of the
writer.

In 19 UI and I9 U2 he could also visit Bengal and South India

and had the chance to study rural conditions around Shantiniketan (Bengal)
and Bangalore (South India).

Through many relatives end friends he was

able to get first hand information about the farming conditions in Sind
and Central States and the United Provinces.

This personal experience

he has supplemented with village surveys made by many other competent
investigators.
Deductive Method;

This method has been used to formulate cri­

teria of policy as well as to deduce the effects of certain programs
and policies.

In some cases as the result of experience in other coun­

tries, and in some cases even in India, such deductions have been con­
firmed by supporting data.
upon.

Elsewhere a priori reasoning has been relied

This might seem contrary to the current trend in economic studies.

But the writer feels convinced that there are certain things which a
human being prises, yet which cannot be gleaned from statistical studies,
for they refer to things not as they are but as they ought to be.

The

greater portion of the lives of majority of men is controlled and govern­
ed by habit or impulse.

It is only at certain moments that the ordinary

5----------------------------------

Report Royal Commission on Agriculture In India, (Londons H.K. Station­
ary Office, 1928), p. 94

10

In India the peasants (farmers) do not live on their farms but live
in one compact place in a central situation. This compact collection of
houses is called the village. It has no similarity to an American village.

s
man la truly himself and fully realizes the true nature and significance
of his desires, ambitions and ideals*

By catching him at any fleeting

moment and questioning him or observing his behavior is not likely to
reveal what values he cherishes more than others, or how he might act
in a given situation*

What people do, or do not do today, does not

guarantee that they would follow the same course at another time, under
different circumstances and different motivation*

Of course when the

facts of life belie the deduction, the latter will have to be modified
or even rejected.

But when it is not possible to appeal to facts, or

whan the facts cannot project us into the future, we cannot Ignore the
issue by not thinking about it*
to a -priori reasoning*

Zn such cases we must perforce resort

This is particularly true in the matter of for­

mulating criteria of good policy and deducing consequences of policies
which have not been tried so far, at least not under conditions where
we are interested In seeing their application*
Comparative Method:

Zn addition to the above two methods, use

has been m ^ a of the comparative method*

The results of the policies

followed in some other countries, with more or less similar problems,
have been examined and their applicability studied in relation to con­
ditions obtaining in India*

Zn connection with some policies data re­

garding their success or failure has been available, and therefore the
conclusions have been based in the light of actual verification*

With

regard to still untried policies or inadequately tried policies, their
desirability and effectiveness have been examined in the light of the
criteria propounded*

Of necessity* such conclusions are of tentative

nature, and might be disproved in the light of future experience*

But

theories have to be formulated before they can be either accepted or
rejected.

Therefore the procedure seems perfectly logical and scientific*

9
Scope
Zhis study is confined only to the problems facing rural (village)
India*

This has been done on the assumption that if India is able to

solve the problems of about 87 per cent of her people who live in rural
areas, the rest would become a simple matter, if not actually solved in
the very process, since the welfare of the rural and urban populations
is so interdependent.
Furthermore, this study deals mainly with the basic weaknesses
of the rural economy,

After having seen and examined the working of the

pa6t programs, designed to ameliorate the condition of the rural people,
the writer is convinced that no program or policy, which does not strike
at the root of the problem, can accomplish the desired end.

Minor im­

provements or make— shift expedients might mitigate the severity of the
evil, but do

not remove the root cause, and therefore the efforts do

not catch up with the malady.

TO take one exasple, while consolidation

of parceled holdings is very desirable to make farming efficient. It
does not solve the problem.

It might succeed in bringing a temporary

relief and advantage to the peasant, but as soon as his sons marry and
have children, the land has to be divided again, and the problem re­
appears.

In other cases the consolidated holding itself may be far

short of the optimum economic size, and therefore does not help the
situation.
The basic weaknesses which must be removed are (a) lack of
education, (b) over-population, (c) lack of Industries, (d) improper
utilization of land and (e) low and fluctuating returns,
Without education no progress is possible.

Without control

of the growth of population the best efforts would come to naught

within a generation or two*

Since land Is one of the major factors of

production, no significant improvement in production is possible without
assuring proper utilisation of land*

But all the efforts of the peas­

ant as well so the state may fall to improve the condition of the peas­
ant if he is not assured adequate income through proper financial poli­
cies*
These basic weaknesses may be tackled in two ways:

(a) through

central over-all planning and (b) long-range coordinated policies*

3he

first implies unlfled*comprehensive,centralised and bureaucratic control
over the whole economic system*

Die second aims at removing the evils

through regulated laissez-faire.

In view of the Importance of the means

to be adopted, it has been thought necessary to consider the pros and
cons of the two courses of action*
Since no discussion in this connection could be fruitful with­
out considering the final goal of economic activity, an examination of
what human beings want from life had to be brought into relation with
the suggested course of action*

Dius a study of the criteria of good

policy has been considered necessary*
Ordinarily international trade policies should have cam under
the purview of such a study.

Bxese, however, have been omitted*

Tor

under the present international situation, and the fact that such poli­
cies can only be formulated in consultation with other powers, makes
such a study unrealistic and meaningless*

Such policies must wait till

things settle down, and consensus among nations shows signs of effect­
ive development*
Tinally this study confines itself to policies of peacetime
economy.

Should the country be compelled to gear its economy to war

objectives, the policies outlined here might not have any application*
It least not without considerable modifications*

CHAP SEE IX
IBS BACZGEOUHD

To get a proper perspective and understanding of the problems
of Indian economy It Is necessary to outline briefly the geography*
the demography and pattern of economic organisation of the country.
Throughout the following study the word India refers to the old geo*
graphical and political unity that existed before the division of the
country in August 19^7•

This has been necessary In view of the fact

that past data and literature relate to the whole country* and new
data and figures based on partition will not be available for some
time to come.

Be side s^ the division of the country has not affected

the basic problems of the country since the division is more or less
arbitrary from an economic standpoint.
Geography
The influence of the physical factors on the economic life of
m

a country need not be stressed.

They are the prime determinants of

the products of the country* the occupation of the people* their densi­
ty and distribution* or in one word the pattern of their life.^
India is a huge sub-continent with an area of l*5Sl,hlO square
t

^Vera Anstey* op. cit.* p. 11

11

12

miles end a population of 388 million peopled

In 19^0* in British

India Ul.8 per cent (£?lh million acres) of the total area was classic
fied as net sown area* 8*9 per cent (h5 million acres) as current fallow,
19*1 per cent (98 million acres) as cultivable waste and 1 6 .9 per cent

(87 million acres) as not available for cultivation.

While 13*3 per

cent (68 million acres) was under forests.e
She country extends from 8° to 37° Worth latitude, about *2000
miles, and from 6l° to 100° East longitude, about 2500 miles.

She HIma-

layan range in the north and the east separates the country from SLbet
and Burma, and influences the agricultural economy of the major part of
the country through the Monsoons.

These Monsoons not only stqpply rains

but also feed the rivers which irrigate, and occasionally flood, many
million acres of Indo-Oangetlc Plain.

Hindukush. and Suleiman ranges in

the north west separate the country from Afghanistan and Persia.

But

through the Khyber and Bolan passes, they have played a very important
role in the history of India, first by permitting the Aryans, and later
the Muslims to infiltrate into the country.
The Arabian Sea on the southwest and the Indian Sea on the south­
east give about h300 miles of coast line and four chief harbors, Karachi
and Bombay on the Arabian Sea, and Madras and Calcutta on the Indian
Sea.

These seas connect India with the rest of the world, and also

supply the Monsoon winds.

These winds heavily laden with moisture,

after striking against the Himalayan ranges, are deflected to different
parts of the country to give rains on which depend the fortunes of India's
East India Census 19^1 (London: H. M. Stationary Office), p. 3
*Imperlel Council of Agricultural Be search, (Delhi, 19^0* » Memorandum
on Agrlcological Development in India. Figures for the native states are
not available. But it has been estimated that of the total h88 million
acres of the States area lhS million acres is net sown area, 3 U million
acres current fallow, 79 million acres cultivable waste, 188 million acres
not available for cultivation and 39 million acres tinder forests.

13

predominantly agricultural economy*
She country can be diTided into three geographical regions*
▼is., (a) The northern region of Himalayan ranges* which in addition
to influencing the rain and the climate* forms the foreet wealth of
the country, (b) the Indo-Gangetic Plain extending from the Indus
Elver in the north to Brahmaputra Elver in the east.

Mostly composed

of silt and watered by a network of rivers it forms the most extensive
sheet of level cultivation in the world,*

There are no rocks or stones

to alter the uniform character of the alluvium* (c) the Triangular
Peninsula of the south which is separated from the rest of the country
by passable Vindhya and Satpura ranges.

This part is an elevated pla­

teau. about 1^00 to 2500 above the sea level, flanked on the east and
the west by two ranges* known as the Eastern and the Western Ghats.
k
It is mostly hilly in nature*
The average rainfall in India varies from about h inches in
Sind. 9 , 5 inches in the southwest* ll*h inches in the central states*
2h.*y inches in Madras and Deccan and 30 inches in the tfoited provinces
to 100 inches in Bombay and hOO inches in Assam Valley in the east*
Since only about 26 per cent of the land is under artificial irrigation,^
agriculture in India is mostly dependent vpon rains which bring pros­
perity or famine by their abundance and scarcity.

Too much rain oc­

casionally brings destruction through floods and inundations.
Hie rains are dependent on the summer and the winter Monsoons*
The former last from the middle of June to the middle of September*
^Sir m . B. Nanavati and J. J. Anjarla* Indian Rural Problems. (Bombay:
Indian Society of Agricultural Economics, 19U4J, p* 11
Dudley Stasp, Asia. (New Yorks E. P. Dutton & Co., 1938), P* 173
(Most of the geographical discussion is based on this source),
^Statistical Summary. Census 19^1* (Delhi: Manager of Publications), p. 11

forming the main rainy season in the country.

The latter continues from

December to February, giving limited rain to restricted areas*
seasonal rainfall is responsible for two crop seasons*

Shis

She Kharlf

crop8, e*g*, rice, cotton, sugar cane, Jute and millets are sown about
June and harvested in the fall*

The Babi crops, e.g., wheat, barley,

linseed, tobacco and oil seeds, etc*, are sown at the end of the summer
Monsoons about the middle of September and harvested in the spring*
Die Monsoons, besides determining the rain and through it the
density of the population, have also affected the character, outlook and
social organization of the people*

"An abundant rainfall resulting in

an easy solution of the bread problem, has made people ease-loving, con­
servative* and disposed to religious speculation, while its uncertainty
has made them fatalistic.....
The tenperature, except in the north which shows extremes from
-5° to 125°Fahrenhelt, varies from 40° to 85° Fahrenheit.

This enables

the people to live without any elaborate clothing and houses*

This

type of climate is also to some extent responsible for the slothfulness
and laziness of the people*

Diey lack vigor and stamina which is a

characteristic of the people living in temperate regions*
Bxere are four chief types of soil in India:7
(a)

Die alluvial in the In&o-Gangetlc Plain.

The main crops

are wheat, sugar cane and rice*
(b)

Bed soil of the Southern Peninsula extending to the Fast

through Bydrabad and Central Provinces*

Millets are the principal crop*

^E. Chatterjee, Indian Economics, (Calcutta:
p. 11
-------------^Beport Boyal Commission, op. dt*. pp. 70-74

H. Chat terJee & Co*. 1947)

15

(c)

Blade soil of the Central Provinces and the Upper Southern

Peninsula, producing cotton and millets*
(d)

Lateritic soil ie found in Central Provinces* Assam and

also along the Eastern and Western Ghats.

Plantation crop* especially

tea, is important*
Resources
As the result of the varied geographical conditions* India can
produce both tropical and semi-tropical crops, fruits* vegetables and
forest products (Table I)*
TABLE I
LEAPING AGRICULTURAL AND MINERAL PRODUCTS 07 INDIA
Rice
Wheat
Maize (Com)
Barley
Cane sugar (raw)
Tea
Rubber
Tobacco
Jute (raw)
Cotton
Linseed
Groundnuts (peanut)
Rapeseed
Sesamum
Coal (Br* India)
Iron ore (metal content)
Pig iron and ferro alloy
Steel
Manganese
Chrome ore
Bauxite
Gold
Petroleum (crude)
Source;

Tear________ 000 Short Tons
194-3-44
51.305
12*612
19*15
2,341
19*10
2,530
19*11
1 9 4 3 - 1*
3.817
275
19*13
17.
19**5
524
1940
1944
1.087
688
19*15
458
19**3
3.71*1
19*13
1*196
19*13
508
19*13
19*15
29.119
1935
1945
l*4l6
19*15
1941
539
11%

19*15
1 9 *1*1

16*
170
392

Britannica Book of the Tear 19*l7» (Chicago)* p* 402

India is the largest cane-producing country in the world and shares
with China the primacy for production of rice* In cotton it ranks
next only to the tfoited States* It leads the world in production

16
of groundnut, and ranks next to Argentina in linseed* In Jute
and in lac it possesses almost a monopoly. In millets India ranks
with China and Africa as one of the three main producing regions*
Of tea it is one of the largest exporters to the United Kingdom,
ranking next to China as the biggest producer*2'
About lU per cent of the total area is under forests*

Besides

preventing soil erosion and influencing rainfall, the forests are a great
source of national wealth*

3ven with present insufficient development,

they yielded a net income of Hupees 7*867,000 in 1939—^0*^
equal to 3°*25 cents).

(One rupee is

The high mountains yield pine, fir, and bamboo,

while the low mountains grow tea, sal and babul.

There are great possi­

bilities of such industries as manufacture of charcoal, turpentine, laoculture, dyeing and tanning material, basket, rope and mat making**’®
While Indie, has climatic conditions very favorable for fruit pro­
duction, the possibilities have been scantily utilized, the area under
fruits being only 3*9 million acres in 1939—

3D1* chief fruits are

apple?, peaches, pears in Kashmir and Northwest Frontier Province; citrus
and mangoes in the Panjab; ormges in the Central Provinces; bananas and
mangoes in United Provinces, Bombay and Bengal.

In addition grapeb, pom-

grenates and litchle can also be grown successfully in different parts
of the country.
The country has one-fourth of the total livestock animals in
the world.

A large number of these, however, are uneconomic (old cows,

etc*, because Hindu sentiment and religion forbids killing of animals,
especially cows) while most of them are of inferior quality*12 Neverthe­
less, N* C. Wright in his report, "Development of the Cattle and Dairy
gj

H"“ "

"

Sir T* Yijayaraghavacharya,. The Land and Its Problems (2nd ed*, Bombay;
Oxford University Press, 1 9 pp*
Kanavati and An jaria, op* clt*, p. 15
10Ibid., p. 16
^Ibid., p* IS

Ibid., pp. 1S-19

17
Industries of Indie" (1937). estimated that animals yield in the fora
of milk and milk products* hides and skins* cattle labor and manure
shout 30 per cent of the total Income of agriculture *!3 f. Ware, how­
ever* estimates that the total income is over Rtpees 12*630*000 which
is more than the value of India's cash crops*!** As to the supply of
fish* though so far it has not been adequately developed* it is believed
that the resources are considerable*!3
India has a large quantity of undeveloped mineral deposits*
She has the largest coal deposits in the whole of the British Itapire
with the exception of the United Kingdom*^

Her iron resources are much

larger thwn any country of the south and east Asia*
estimates these to be at least 3*000 million tons*!?

Shaumnkham Chatty
Her bauxite de­

posits* much of which is of high grade* are estimated at 2 3 0 million
tons* which makes her the greatest potential si^iplier of this metal in
the world**"**

(There are aaple resources of mica* chromite* llmenite*

molybdenum* salt tungsten and materials for cement* glass* refractories
and abrasives*

She is* however, not so well supplied with oil* sulphur*

copper* tin* nickel, lead* zinc* graphites* phosphates* and potash*^
India's water power resources, however, areconsidered

to be

next only to Canada and the United States* dhe potentialreserve

is

estimated to be 2J million kilowatts* but only half a million kilowatts

^quoted by Uanavati and inJaria, op* clt** p* 19
^Stukerjee and Bey (ed*)* "Animal Husbandry", Economic Problems of India,
(Londons Macmillan and Co*, 1939)* P» !*40
— — —— — — — — — — ——
^Nanavati and Anjarla, op* cit*# p* 20
!^Nanavati and AnJaria, op* clt* , p* 6
!?"India's lighting strength," Foreign Affairs* April ,19*42, pp* *+10-20
^V* S* Thompson. Population and Peace in Pacific, (Chicago} University
Press, 19*46), p. 237*---------- --------------19Ibid., p. 237

18

have been developed so far*20

Nevertheless, India promises to be one

of the leading countries in the world in regard to the development of
hydro-electric power,2^

Bie chief centers of hydro—electric develop­

ment at present are (a)

the waterfall of western United Provinces,

which is expected to generate a minimum of 1 2 5 ,0 0 0 kilowatts when com­
pleted, (b)

Tata and .Andhra Talley schemes in Bombay Presidency have

a combined capacity of 2h6,600 horsepower, (c) Mysore Works when com­
pleted would make a total of 89,000 horsepower, (d) Pykara Hydro-elec­
tric Works can with full storage generate 90,000 horsepower in addi­
tion to 3 0 ,0 0 0 horsepower from the tail water at a lower site, (e) Mandl
scheme in the Fenjab which will give a total output of 118,000 kilowatts.22
Demography and Living Conditions
Mo 81 of the vast vegetable and mineral resources, however, are
undeveloped, and others inadequately developed*

Uhe result is that

despite the potential wealth of the country, most of her 3 S8 million
people live in dire poverty.

A, comparison of per capita income in India

with other countries will give some idea of poverty in the country
(Table II)*

20Uanavati and Anjaria, op* cit*, p. 7
21
Indian Year Book, 19^0-Ul, (Bombay: Times of India Press), p* 378
22
S* M. JUchtar and others, Indian Bconomics, (2nd rev* ed*, Delhi:
S. Ohand & Oo*, 19^6)
---------------

19

table

IX

PER CAPITA INCOME IN DIFFERENT COUNTRIES IN TERMS
OF INTERNATIONAL UNITS
(over the period 1925 -3 *)
U. S.A.
Canada
New Zealand
Great Britain
Switzerland
Australia
Netherlands
Erie
France
Denmark
Sweden
Germany
Belgium
Norway
Austria
Czecho Slovakia
Greece

1*381
1*337
1,201
I.O69
1,018
980
855
707
684
680
6U6
600

539
511
**55
397

Finland
Hungary
Japan
Poland
Latvia
Italy
Estonia
Tugo slavia
U* S* S*R*
South Africa
Bulgaria
Rumania
Lithuania

380
359
353
352
3*5
3*3
3*1
330
320
276

259

2 U3
207

SR* INDIA Appcux.200
100 to 200
China
N

Source: Colin Clark, Conditions of Economic Progress,
(London: Macmillan & Co., 1940), pp. 41-^2
(NOTE: Because of the lack of statistical data pertaining
to the Indian Native States, the figure for India applies
only to that part which was under the British rule* And
even in British India "because of the absence of coupe tent
data collecting agency, the figures are only a rough esti­
mate*)
Die result of this low Income becomes more significant if we
coopare the average span of life in India with other countries (Table
III).
Not only is the population too large in relation to the annual
income of the country but also the situation is deteriorating as the
result of the rapid growth of population.

In the past the effect of

the high birth rate was considerably neutralised by a similarly high
death rate and the population did not Increase so much (Table IV)«

In

fact the growth of population, contrary to the general impression, was
considerably lower than in European countries*

Thus,

The population of India in the area as enumerated in 1921* but
not including Burma, actually grew only by 49 million in tbs

20

latter year* This growth Is 19 per cent in the
years ending
in 1921, or an average annual rate of slightly less than O.h
per cent. This is about half the rate that prevailed in Europe
from 1850 to 190O....23
TABLE III
AVERAGE EXPECTATION OP LIFE AT BIBTH
ZN SELECTED COUNTRIES
COUNTRIES
U.S.A. (1938)
U.S.S.R. (1926-7)
New Zealand (1931)
Japan (1935-6)
INDIA (1931)
Germany (1932-h)
U.X. (1937)
Italy (1930-2)

MEN
6 2 .1 2

VOMEN
66.20
*6.79

2 6 .9 1

6 7 .8 8
*9 .6 3
2 6 .5 6

59*86
60.18
53*76

62.81
64.H0
56.00

**6 .9 2

Sources Statistical Year Book of League of Nations.
1939—*^0 (Geneva), pp. £>£>-6^
".
But during the last two decadeb ending in 19^1. greatly as the
ph
result of better health, sanitary measures, hospital facilities,
and
better provisions against famines, the death rate has fallen by 50 per
cent.

Since the birth rate fell only by about 2b per cent (T&ble IT)

there was a population increase of 27 per cent in 20 years (1921-Ul),
or an average annual increase of 1.2 per cent.2^

After 19^1* however,

the birth rate has gone down appreciably (about 25 per cent).

Tet when

related to the fall in the death rate of about 50 per cent, the popula­
tion situation offers no reason for being optimistic.
23
^Warren S. Thompson. Plenty of People, ’(Lancasters The Jaques Cat tell
Press, 19UI*), p. 16
—
2b .
Brij Narain, Indian Economic Problems Pre-war, War and Post-war.
(Lahore* Atma Bam & Sons, 19*14), p. 12
25
*
Thompson, Plenty of People, op. clt., p. lb

21

USABLE XT
BIRTH A»D DEATH RATES XV IHDIA
(Per Thousand Population)
Tear

Birth Rate

1 8 8 5 - 9 0 (av.)

1890-1901 (av.)
1 9 0 1 -1 9 1 1 (av.)
1911-21 (av.)
1921-31 (av.)
1931-35 (av*)

1936

36
3 I+
38

37
35
35

36

1937
1938
1939
19 U0
1941
1942

33*7
33-3
32.7
3 2 .O

1943
1944
1945
19*6

2 5 .9
2 5 .4
2 7 .3
2 7 .9

3 2 .1

29.3

Death Rate
26
31

34
34
26

24
23
21*9
23*7

21.5

2 1 .1
2 1 .8

21.3
23.6
2 4 .1
2 1 .5
1 7 .5

Sourcei Prom 1885-1936* S. Chandrasekhar*
India*s Population8 Tact and Policy. (New York*
The John Day Co., 1946), p. ^9
Prom 1937—1946, United Nations Statistical
Bulletin, Sept. 1947, pp. 10 and l5
This average population increase of 1.2 per cent per pear in
the last decade, however, does not indicate the seriousness of the
situation.

In ten pears this seemingly modest increase has pielded

India a net gain of more than 50 million people.

This is a greater num­

ber than the entire population of any European country except Germany
pC
or Russia or of any Latin American country. u
Pood production has not kept pace with this increase in popula­
tion,27 vith the result that "poverty and need make themselves evident
on all sides when one goes among the village people of India"*2^
-•

Chandrasekhar, op. cit*. p. 1 6
27--------------- -----BriJ Narain, Economic Structure of Pree India, (Lahore*
Co., 1946). p. 15

Indian Book

T)* %>encer Hatch, Up Prom Poverty, (Bombay* oxford University Press.
1936), p. 3
--------- ----

22

It is estimated that 90 per cent of the people of India are
living constantly in sight of hnngerline,2^

While this statement might

he an exaggeration, a scientific study made by sir John Kegaw with the
assistance of 600 doctors throughout India, shoved that only 39 P®r oent
of the people were adequately nourished, MO per cent were poorly fed,
and 20 per cent came under the category of "very badly nourished" (Table 7),
Table v
STANDABD 07 NOURISHMENT IE INDIA
Province

Population Average acres Average Percent
Percent
Per cant
cultivated per No, per
well
Badly
Very badly
______ __________ family
family Nourished Nourished Nourished
5 ,6
Assam
22,522
9
3«
6 .9
53
United
21
MO
5 .4
9 -6
Provinces 52,055
39
Central
0.8
18
50
5*0
Provinces 83,351
16.5
18
5 .0
1 .7
6.3
Madras
278,377
36
22
5 .0
Bengal
93*921
31
5*5
I
*7
42
M
o
18
5 .8
Bihar
35.748
5*7
M
2
20
6,2
Panjab
108,813
1 7 .3
f
t
11
5
.2
13.8
Bombay
68,700
M5
Average for
4i
20
5*4
Whole India
8 .4
39
^ Source: Sir John kegaw,An Inquiry into Certain Public Health Aspects
of Village Life in India. 1933* p. 10
The rapid growth of population becomes a more serious problem
in view of the fact that the vast majority of the people live in villages
and, directly or indirectly, are dependent on land for their means of sub**
sistence.

The land virtually is fixed in area,

3he small Increase in

total acreage due to development of Irrigation projects is almost infini­
tesimal in comparison with the increase of population.

Dais increasing

pressure on land, coupled with the law of inheritance, according to which
29

G. £. Jather & S. G. Beri, op, cit,, p, 69

23

land must be divided equally among heirs, has led to a great sub-divi—
slon of holdings (Sable YX).
SABLE YX
AYEHAGE SIZE 07 PABM HOLDINGS XN INDIA (1931)
Province

Average aise of holdings (acres)

Bombay
Central Province
Panjab
Madras
Bengal
As sea
United Provinces
Bihar and Orrissa
Sind

11*7
8.5
7.2
2*0 (circa)

6*0
h to 5

38.7

~
Sources &anavati and Anjaria, op« cit., p. 132
Notes Large holdings in Sind are due to derelopments of
irrigation projects by which more land has been brought
under cultivation.
Besides the holdings are scattered in smell pieces all over the
area of the village.

Shis is done to equalise the fertility and situa~

tlon advantage of the shares of the heirs.

Shis sltuatlon( however, is

not characteristic of India alone but is also found la many parts of
the world. Including Europe*^®
somewhat eased the situation.

In Europe, however, urbanisation has
But in India this movement has been very

slow as the following table shows*
3d

......
1...
J. B. Condliffe, Economic Pattern of World Population. (Washingtons
National Planning Association, 19^3!)• p* 25

TABLE 711
RURAL-URBAN POPULATION IN INDIA
(PERCENTAGE 07 TOTAL)
Tear

Rural

Urban

1872

91*28

1881

90.5?
90*54

8 .7 2
9 *Ul

1891
1901

9 0 .2 1

19U
1921

1931
1941
Sourest

9.46
9.79
9-35

90.65
89.70
89.00

1 0 .3 0
1 1 .0 0

87*28

12.78

Chandrasekhar, op« clt«« p. 29

The pressure of population not only makes itself felt in the
fora of small and scattered holdings vhieh can he anything hut effi­
cient, hut also in the fora of over-crowded and uasetlsfaetory living
conditions*

Though no proper survey has heea aade in this connection

yet
it is estimated that of the 66.4 million occupied houses in
India*8 695*092 villages, not more than two per cent are
"pukka11 or hrick hullt houses* and not acre than 7 per cent
are well hullt "kuteha" houses* namely houses with walls of
mud, wood, or hamhoo netting, roofs of thatch, tiles or cor­
rugated iron sheeting, and with doors and windows of some
kind or other* The rest are just huts* hovels or shacks*
hardly deserving the term "houses".31
House room often exists only in name as whole families have to
huddle tqp, live, eat, drink and sleep inthe seme snail room* 32

in

aany cases animals and awn share a room together, especially in the
North where the cattle must he shielded from the cold in winter*
The situation with regard to clothing is equally had (Table
VIII),

Per capita consultlon of 0 0 1ton plecegoods in 1929 was 16*1

Chandrasekhar, op* cit*, p* 36
V, I, R. 7* Rao, What is NTong with Indian Economic life* (Boahays
Vora & Co., 1938). p* k

25

yards as compared to 6k yards in the U.S.A,

While it is no doubt true

that people of India* on account of the climatic conditions do not re­
quire as ouch clothing as in the Halted States and some other countries,
yet the fact that cotton cloth is usually the only type that is used and
people are seen going about in rags or insufficient clothes rereals that
the situation in this respect is anything but satisfactory*
TABLE Till
PEE CAPITA. CONSUMPTION OP COTTON PIECE OOOD8
IN TABDS (1929)
Japan
Egypt
Brasil
Iraq
INDIA
Greece
Sourest die World Textile Industry! Economics and
Social Problems, rol* 1* p* l6S, quoted by P. Thakurdas
and others, A Plan of Economic Development of India,
(Penguin Books, 19***0» P* H
Occupational Distribution of Population
Of the total working population of India, 65*0 per cent are en­
gaged in agricultural and pastoral pursuits, 10*3 per cent in industry,
7*5 per cent in domestic service, 5,5 per cent in trade, 1*6 per cant
la transport and 1*6 per cent in professions and liberal arts,

Pive

per cent have been insufficiently described, while one per cent have
been classified as unproductive,^

The distribution of the workers in

agricultural and pastoral occupations is as follows!

^Chandrasekhar, op, cit,, p, k&

USLZ XX
AGRICULTURAL AffD PASTORAL OCCUPATION
distribution (191+1 )
Occupation.

Humber

Non-cultivatlng landlords
Cultivators— Owners and tenants
Estate managers, rent collectors,
agents* clerks
Agricultural laborers
Cultivation of fruits and vegetables
Forestry
Stock raising
Raising small anlnals
Source:

^,150*758
65»**95*2W
269 ,**50

33»52 3*^3
1,907,126
912,631
3*911*335
60,821

Chandrasekhar, op, cit,, p.JO
Organisation of Rural Economy

VI th about 87 per cent of the people living in India's 655,892
villages, the economy of India can rightly be called a Tillage Economy*
3U
These villages are of two types*
One Is the Zaalndarl village In which the whole lead of the vill­
age Is owned by the landlord or a body of co-sharers*

The actual culti­

vators are tenants who may be hereditary tenants or tenants-at-wlll•
Usually the landlord is the "sleeping partner" and takes no Interest la
farming, whether directly or Indirectly.

Hie chief concern is the rent*

As long as he gets that, he does not bother with the affairs of the
tenant*

He rarely takes any Interest In the improvements of the land,
35
nor does he ordinarily suqpply capital to the tenant for this purpose*
He might lend money to the tenants for any needs they might have*
beyond getting a high rate of interest he is not concerned*

But

Land Revenue

■*h
"""" '1...
" i"!—•
Jather and Berl, op* elt*, pp. Ull-Ul2

35

-------

H* Calvert, The wealth and Welfare of the Punjab. (2d ed., Lahore*
**• Civil and Military Oasette, Ltd*, 1936), p. 195

27

is paid by the tenant cultivating lend on cash rent basis, while if the
land is rented on crop share basis the Land Revenue is shared equally
by the landlord and the tenant#
She second type is the Ryo tv/ari village which has a different
organization.

Here the land is owned and cultivated separately by the

various owners.

There is more or less a family type of farming or peas­

ant proprietorship, as it is more commonly called#

’
She Land Revenue is

assessed separately on each holding and the responsibility for the pay—
ment is by the individual title holder#-'
It is this second type of village which is more characteristic in
India.

However, aside from the relations between landlord and the ten­

ants it dees not differ very much from the first type either in form or
organization,

though it is usually larger in size and more completely

self-sufficient.

The Zamindari village i s

usually smaller end may not

have all the classes and costec such as barber, weaver, washerman, car­
penter, blacksmith, cobbler, mini star al, etc., which would be found in
the typical Indian village#
The typical village is a collection of huts, cottages, or houses
huddled together in the midst of the fields from which the inhabitants
derive their livelihood,37

Very often different sections of the village

are inhabited by different classes of people#

Thus in one section may

live the land owners and in another the tenants#

The artisans and the

laborers who usually belong to the lowest class, or caste, live in one
corner.

There may also be a business center where the moneylenders,

shopkeepers, goldsmith,

tailor live and carry on their trade#

In the

3^

.
Jather and Reri, oo. cit., p# *+

37

The Marquees of Linlithgow, The Indian Peasant, (London:

barber, 1 3 3 1 0 , p . 13

Pfirber and

28

Zamindari village the landlord or his family may live away from the
village itself, or they may have a "big house in the center of the
village surrounded "by the huts or houses of the tenants.
The village economy centers around the landlord or the peasant
proprietors as the case may he.
age activity.

They are the pivot of the whole vill­

The shopkeeper, the trader, the moneylender, the artisans

end the laborers all are there to minister to the needs of the land
holders.

Around the latter is founded the whole structure of India's
7g

rural economy.^

Except in the areas of specialized and commercial farming and
also in some of the Zamindari hamlets, where only a small number of ten­
ants may be living, the village is more or lees a self-sufficient unit,
meeting most of the needs of the villagers from its resources.^

Means

of transportation and communicationo are still inadequate and migration
Is relatively uncommon.

"Generation succeeds to generation, the life

is largely controlled by custom, and the surface of existence is hardly
ruffled by events in the great world beyond the confines of the village
territory."

Life runs its slow traditional current in the framework

of a social organization handed from father to son.

Status and not con-

tract provide the basis of social orie r . T
As the result of this self— sufficleny, in the past the econoajy
of the village has fluctuated from prosperity to famine, depending on
the

nature

of

the harvest.

In the absence of good means of transporta­

tion the grain rotted when there

wpe

a bumper crop, and people rotted

3§

Linlitnyow, op. cit., p. 9

39

- * -------------------

Report Royal Commission, op. cit., p. U-7S
Uo

r

Linllthgow, op. cit., p. 15
*+1
p. 13

■— —

—

29

v/hen tne crops failed.

This has been changed now as the result of im—

provemonts in communications and better means of transport.
sufficiency of the village is gradually breaking up.

The Belf—

World influences,

through the prices of agricultural products, have already penetrated
to the village, although the peasant usually does not understand why
and how the prices fluctuate up and down. 4-2
The village very largely governs itself.

Formerly it was the

village Farchcynt (council of village elders) which decided all issues
or disputes#

2ut the alien legal code introduced by the British rule

weakened this institution considerably.

Recently, however, efforts have

been made to revive the Fanchayat by legalising it and giving it wide
powers.

The village headman, assisted by the chowkidar (the village

watchmen), is official agent of the government and is answerable to the
authorities for peace and order in the village.

But unless the head­

man also happens to be a big landlord cr a revered elder of the Panchayat,
his official status does not confer any special status in the deliberations
of the Pnnchayat.

The letter is usually an informal body of highly res­

pected end wise villagers.
The unit of life in the village is the joint-family.
hold usually consists of three generations ( g r a n d f a t h e r ,

A house­

father, and sons)

who work together and pool their resources and income under the head of
the family.

The latter is usually the senior male member of the family,

Ee makes disbursements from the common fund according to the needs of the
family and its different members.
weakening of this system.

Recently, however, there has been a

ITow the tendency is that as soon as the grown

2. V. V.’ilcox, Acres and People, (*'ew York:
19^7) p. 177

Orange Judd Publishing Co.,

30

up

son m a x 'ice and

establishes

n

jointly with
children

of

lino

and

There
in

rest

land

is

traditional
ments

for

the

of

made

to

waterman,

shoemaker,

tailor,

or

to

most
vator
and

crops

acreage

the

rr t e

of
is

gr-de

•nd

so

is

on

by

according
on.

according

to

Thus
the

art a d d i t i o n a l

when

continue

he has
and

the
the

faras

of

separately*

by

division of labor

blood

in

different

The

consists

second

charge

course,

type

types of
is

for

to

l a n d s uco-i f o r

charge

the

c:iiled

the

tax)
basis

sewn.

the f o d d e r

tire l a n d

fertility of

service

rent

is A
the

pay

water

of

the

service

the c a s e

of

Another

type of

land

commercial
Trie l a n d s
and

£ grade

In canal

be

every culti­

the

crop,

to

rent.

crops.

rate.

some

which

For

grade,
same

rendered.

blacksmith,

in

their fertility,

soil.

the

render

does not

(land

crops

according

to w h e t h e r

according

the payments

who

is

a s s e s s e d or. t h e

it

of

the

axe

o r percen.'b-

vc ahermax., carpenter,

the Land R e v e n u e

then

to

Pay­

of people

tcp l a c e ,

relation

and

the father.

classes

from place

those neople

of

of

special

a customary share

little

priest,

(by crafts)

do t h eir

o coup a tion

varies

and all

for

to w o r k

a number

mainly

rnd castes

the h a r v e s t

tax is

higher

varies

nay

trie l a n d

siia.pa o f

share

different

rate

Is

up

the

barber,

This

been classified

there

in

oilman,

have

vary

el'-ssse

and bears

charge

charge

of

complete

The peasant-proprietor,

lias t o p a y .

the

a

work of

the peasant.

important

though

sh:-re

taking

and

usage,

the

tenants.

son

This

first

another

less

in kind,

Tne

he

and

will.

different

services

village

however,

family,
his

t e r f r o 2; t h e j o i n t - f a m i l y

rev r

o t h e r p r o p art:' is g o v e r n e d

or

the

the harvest.

to local

gets

and

The

ma.de

the

seldom by

work,

ordinarily
age

of

more

the village.

he

household.

ordinarily

Inheritance
the male

children,

separate
the

he

hue

the

the
or

is

C

tax will

irrigated

This

tax

areas

supposed

31

to

be

much

is

tV*

•.r i c e

for

supply

of c<-nrl

..i^r.er t.oan

the cost

of

supplying

A f t or

demands

of

the

also

the

forms

the

the

moneylender

moneylender

has

of

the p e a s a n t .

harvest

such

as celebration

This,

of

well

c o .u'se,

driven

to

emergencies

is

borrow
such

me

as meat

the

sic.aneas

in

but

can

rO'd

also

and

tabes

peasants.

If ten

from

actually
may be

the

he

can

highly

beet

the

His

the

of

the country,

ed by

themselves.

well,

end purci-ases

peasant

in

is

ignorant

3r i j : : a r ? d . n ,

hk

the Inch

samples

best

and

Moreover

of

and

V

the

few

on

in

may

ceremonies.

for
his

repayments

any
animals.

of

oart

interest,

of

the

arithmetical
to

free

show more

calculations

he

the village

in

borrower

the

harvest,

rate

the

indulging

accounts

to

the

of

that

obligations

needs or

the

the

and

after

the

case,

religious

death

education

effort.:

the

exorbitant

about

inflated,
To- m a h c

moneylenders

the

of

after

religious

the

an

left

there

of

him—

than

he

has

interest

of debt

may

add

\

; r . i c o o n . 'T ‘1'
the

of

one

is

usually

carry him

these

usually

met,

not

soon

r

muitipiicaticr.s

>

Very

the f a m i l y

The moneylenders

original

to

of

is

and

death

only charges

shows few

debt.

advanced.

debt,

not

advantage

jug.-Very which
self

write,

teen

must

moneylender for

T h e m o n e y l e n d e r , v.-hu i s
that

have

social

mv.c h .

it

'

£ one r a l l y

marriages,

actually

t:

Th: t i n c o m e

to,

But

anything

is

his other

expecting
from

water.

If

which

of births,

'..atcr.

exchequer

paid.

satisfied,

income
as

to b e

been

next

is

the

things

v.i-e c s c r i p t

the moneylender is

crops

of

the

the prevailing

India Before

doubly

and

d e p o r t of the C e n t ral B a n k i n g
1 u b i i c a t i o n c , 1 9 3 )» Cha p . v l i

Since

which

the

In.ulvy

in

Since,
the

Crisis,

C o ct.ittee,

certain parts

can only

usually

percents.
or Ices,

safe,

the
by

trader

op.

be

decipher­

trader

as

and large,
dictates

cit.,

(T e l h i :

o.

the

the

3^f

Manager

of

32

prices.
this

me

shill

is
to

til s o

the best

However,
of human

ennoble
of

forming

frailties

of

his
in

alone.

frrudulent

and

rains

e d s. g a m b l e
be

reduced

in
to

j?ur t h e r m o r e ,

are

rains.

I n d i a c’o e e
Zven

nothing
plant

and

usually
She
as

nature
has

result

animal

pests

not suffer

from

may not be

friendly.

to

uncertain,

industry

the

depend

Commission,

op.

cit.,

on

of

the most

of

too little

may

destroy

p.

rains

agriculture

cattle.

P.e.-.ort l o y a l

and often

uses

advantage.

7*+ p e r c e r t o f t h e c u l t i v a b l e a r e a
supply,

weighing

-339

in

the

re cults
Since

for

India

water
i s call­

efficient peasants may

his

or

too h e a v y

crop

as

well

rains.
as

CHAPT22. Ill
TEC P2C.3I.Ei4s

Though
ways

there

and no m s

rural people,
with

rural

fects

in

yet

life

there

in

is ?47 per

square

(Table

tion

density
the

is

resources

the

mile.

to b e

improve

economy
The

the

are

of

'.hen c o m p a r e d

is

likely

tc

like

many

other

country

gat

It

m l

the

the

average

misleading*

opinion
level

consensus

The following
rural

hut

cf

tc

considerable

X ., o n e

apt

of

is

day

ZCOICOMT

difference

adopted

of Population;

n o t c v e r - p c p u l :• t e d .
age

a vide

be

India.

the present

countries

may be

that may

Pressure
India

WEAKNESSES C? THU " U A L

as

regarding
of

living

to v h a t

veil

the
of

is wrong

recognized

de­

country.
density
with

the

the

situation

impression

averages,
does

of copulation in

not

t: e l e v e l

cf

that

the concent
take

into

economic

in other
India

is

of aver­

considera­
development.

TA3LZ Xd c n c i i y

tr p o p u l a t i o n

or
Czechoslovakia (1337)
S w i t z e r l a n d ( 1 9 4 4 ) ..
H u n g a r y (1944) .....
C e y l o n (1944) ......
D e n m a r k (1345) .....
North Ireland (1444)

T u g l : r. 5 1 : . ' d e s ( I S 1* 1* ) - 7 2 7 .6
L e l g i u m ( l S ' 4h ) . . . . . . .
707.5
Netherlands (1944)
. 531.5

Japan (1740)....

Germany (IS‘44)

. 4 9 5 .0
..

Italy ( 19 4 4 ) ....
Source;
70-75

the

ir. d i f f e r : , : t r e g i o n s
ation of
despite

335.3

Summary of

Noreovor

density
the low

3 S S .1

I n t e r n r i t i o n r .1 V i t r l

average
of

the

density

hides

country.

Thus

in different
average

for

parts

of

the c o u n t r y

Statistics,

the V a r i a t i o n
the

India
as a

..

230.9

..

73 .6
264.2
247.7

244.0
241.1
1337-1944,

in population

examination

of

( T a b l e XI) r e v e i l l e
whole,

the v a r i ­
that

certain parts

are

3*

as thickly populated as any in the world*

The regions of

sparse popular-

tlonare those which for one reason or another are unable to support a
greater number*

Sind* which has been recently colonized as the result

of irrigation projects* is an exception*
TABLE XI
DENSITY OF POPULATION 1ST DIFFERENT PROVINCES OP INDIA (19^1)
(AVERAGE POPULATION PER SQUARE MILE)
Bengal
Bihar
United Provinces
Madras
Orissa
Source:

627
U6UU5 6
390
2k$

PanJab
Bombay
Northwest Frontier Province
Assam
Sind

238
235

179
136
81

Oensus of India"( 19*4-1)

In fact* Judged in terms of per capita income* average span of
life* or whatever other standard may be used* there seems to be little
doubt that India suffers from having to feed too many mouths*^

Further­

more* the total population is increasing at a startling rate* as pre­
viously indicated (Chapter II).
Snail and Scattered Holdings:

As the result of increasing

pressure of population on land* the size of farms has become too small
for their economic exploitation*

Eighty per cent of the holdings are

ten acres or less* while 60 per cent are under five acres*3

If we rememrli
ber that in Germany a holding of 12 acres is considered uneconomic* the
seriousness of the situation in India becomes more evident*

Parcelation*

father & Beri, op* cit,* p. 7 0
Rao, op* cit** p. 7
M* Ezekiel (Ed*)* Towards World Prosperity. (New York: Harper, 19**7)»
5 * 261
Alexander Gerschenkron, "The Land Reform in Germany"* Family Farm
Policy* Eckerman & Harris (Ed*)* (Chicago; Chicago University Press,
W ) , p . 33s

35

which involves considerable waste of time and energy of mart and beast
going from one land parcel to another, further aggravates the situation*
Under such conditions the making of permanent improvements becomes
more difficult, proper supervision is practically impossible and a con­
siderable amount of good land is wasted in balks and boundaries*
The extent of this problem of small and scattered holdings may
be seen for example in two studies, one in the South and another In the
North*

Dr* Mann,in his study of a village in the South,found that 62

per cent of the cultivators' plots were below one acre in size*^

Mr*

Bhalla, in his study of a Panjab village, found that 3^*5 per cent of the
cultivators had over 23 fragments or parcels each*^

These results would

be typical in other parts of the country.
Under such conditions, farming cannot be carried on efficiently*
There is waste because cf uneconomic use of labor and capital.

Tull

use cannot be made of equipment and livestock, but capital has to be
invested in tfhese regardless of whether the farm is small or big*
Inefficient Farming; Over a large part of the country the peae*
ant follows the same methods which his ancestors used many centuries be­
fore the Christian era.^

Die plough merely scratches the surface of

lend, seeds used are defective, the varieties sown are poor ylelders,
while artificial fertilizer is practically unknown*
yard manure is burned as fuel.

Most of the fare*

Bone meal, which could serve as good

fertilizer, is precluded on account of the religious sentiment, and
every year the country exports 100,000 tons of bone meal to renew the
5
^Quoted by Nanavati & Anjaria, op* cit*, p. lhS
Quoted by Jather & Beri, op* cit*, p* 210
-------

Vera Anstey, op. cit., p* 23

36

fertility of foreign land s.^

A comparison of yields per hastenswith other

countries reveals the seriousness of inefficient farming (Table XI0.
TABLE XII
YIELDS OP SELECTED CHOPS IE DIFFERENT COUNTRIES, 1932-36
(Quin tel s per Hectare)
Crop

China

Rice
Wheat
Barley
Maize
Cotton
Linseed
0-round Nut

25.6
11.1
12.1
13»7
2.M
—

Japan

—

IS.2

France

Italy

36.0
13.8
20.U

15.9

13.8

lh.U

10.6
19.6

-------

----

—

21.?

—

1^.6

i*.3

U. S.A.

7.8
8.9

10.5

10.1

13.2

2.1

5.9

2.8

--------

--------

3.5
7.9

—

India

8.3

2.h

U .6
—

Russia

13.7
7.0
9-^
8.7
0.9
2.7

10.0

Source: R. K. Das, "Economics of Indian Agriculture*, Modern
Review, Jan. 19*H» quoted by Wadi a & Merchant, Our Agricul tural Prpb—
lem, (Bombay: New Book Co., 19**5)» p. 1^+0
lay roper Utilisation of Land;

There are two major defects in

land use,
(1)

Inadequate and improper use of land as the result of the

law of inheritance and the systems of tenure.

The former, as we have

seen already, is responsible for small and scattered holdings which can­
not be farmed economically.
use of land.

The latter is responsible for inadequate

Due to lack of capital and real Interest in the land, the

tenant does not adopt measures to make permanent improvements.

On the

other hand the landlord, who has the funds and interest in the land,
usually is too much of an aristocrat to give any thought to the sordid
needs of farming.

And since about 70 per cent of the land is cultivated
9
under the landlord system, the results are quite serious.
(2)

Deterioration of land due to different causes of which three

seem more inportant.
r -----------------------------------------------2*®°*
P* 17
Nanavat*. & Anjarla, op. cit., p. 3^0

(a)

Water-logging, due to the rise of sub-soil water in

canal irrigated areas, makes the land unfit for cultivation by precipi­
tating the salts in the soil*

In certain parts of the country loss of

land from this cause has assumed alarming proportions.

In the Fanjab,

for example, 125*000 acres had been thrown out of cultivation by 192&-27*
and the loss has continued to increase s t e a d i l y I n the United Pro­
vince S million acres of the total area of 6s million acres have been
lost.11
(b)

Soil-erosion also has destroyed many millions of acres

of once rich and fertile land.

For instance, in Hoshiarpur district of

the Panjab 100,000 acres have been made unfit for cultivation, while in
another district, Gujrat, another 100,000 acres have been ruined* i? How­
ever
spectacular evidence of this loss is afforded by United Provinces,
where villages once surrounded by valuable fertile fields now lie
in a network of ravines carved out of the soft mud of the Jumna
by uncontrolled drainage* Less striking, but even more serious
losses of soil have taken place by the action of floods in the
Chambal and other rivers flowing through central India, Gwalior
and Central Province*... The loss is not confined, however, to
these or any other special tracts* It is taking place all over
India., except the rice fields where ridging has conserved the
soil.*3
(c)

Soil depletion:

There are conflicting opinions as to

whether India's soil is being depleted.

Some experts hold that the evi­

dence of soil exhaustion is irrefutable.
This evidence is not backed merely on the theory that, while
much is being taken out of the soil, very little is being put
back; but also on practical demonstrations of increased produc­
tion resulting in aome areas from generous and continuous appli­
cation of manure.1^
ranjab Irrigation Report, quoted by Brij Herein, India Before and Since
the Crisis, p. 115
-------------------^Nanvati & Anjaria, op. cit., p. 36
Akhtar & others, op. cit., p. 136
13
ill®* Vijayaraghaavacharya, op. cit., p. 2h
Mukerjee, Rural Economy in India, o p . cit.. p . 120

3«

On the contrary, on the basic of the evidence produced before
the Royal Conmtission on Agriculture in India, the commissionere were of
the opinion that "a balance has been established, and no further deteri­
orations are likely to take place under the existing conditions of cultivation**^
In the face of this conflicting Judgment it is difficult to state
a positive conclusion.

The majority of the competent observers, however,

seem to agree that lack of artificial fertilizers and the burning of
manure have been responsible for the loss of valuable soil properties at
a rate greater than the replacement either by nature or the practices of
the c u l t i v a t o r T h e writer's own study and experience is in accord
with Sir Dudley Stamp's observation that in certain parts, at least, the
land is being continuously impoverished owing to lack of manure and un­
interrupted cultivation of heavy and exhausting crops.^
Inefficient Marketing:

If the peasant has been hardworking and

nature has been kind, there is still no guarantee that he will be ade­
quately rewarded for his labour.

If he is enterprising enough to decide

to take his produce to the townmarket in the hope of getting better
prices, his first difficulty is

that there are no good roads. The bull­

ocks which haul his produce to market may be weak, and he may not have
the right type of c&rt.

If, however, he overcomes these difficulties

and somehow does reach the market with his produce, there he is pitted
against the traders and dealers of the town, who are adept in practising
every type of fraud.

In this connection, the Royal Commission on Agrlcul-

^Report, op, cit., p. jG
Hanavati & Anjaria, op. cit., p. 3 6
op. cit., p. 227

ture bad to record that
unless he (the peasant) realized that he must, as a seller
of produce, study the art of sale, either as an individual
or through combination with other producers, it is inevitable
that he should come off second best in his contest with highly
specialized knowledge and vastly superior resources of those
who purchased his produce*1®
It is said that with conditions as they exist, the peasant
does not get more than 5 0 per cent of the full value of his produce*1^
There are no storage and warehouse facilities and the peasant has to
accept the price offered, whether high or low*
exploit this helplessness of the peasant*

She dealers fully

Such fraudulent practices

as underweighing, the same man acting as the agent of both the seller
and the purchaser, and settlement of the price under cover are quite
common*^®

There is no provision for grading and standardization and

the peasant haB to accept the Judgment of the purchaser which can not
be disinterested*
Moreover, the peasant is required to pay many charges when he
sells his produce*

JTor exasple, Table XXIi shows the deductions made

in the sale price of the peasant* a produce in Ly allpur, one of the most
progressive cities in India*
lS
Report, op* cit*, p* 3^2
19
B* E* Chatterjee, Indian Economics, (Calcutta:
19^7)* P- 5^

H. Chatterjee and Co*,

20

Mukerjee, Economic Problems of India, op* cit,, p* 319

Uo

TABLE XIII
SELLER* S EXPENSES IN LYALLPUR MARKET PUR RS. 100 OE SALS
Rupees

Annas

Pies*

Commission of the Middleman
Palledari (porterage)
Weighing
Chungl (tip to buyer* s servant)
Brokerage (to buyer* s middleman)
Shagirdi (to apprentice of middleman)
Dharmao (charity)
G-aoshala (old cows home)
Changar (sundry payments in kind)

0
0
0
0
0
0
0
0
1

12
3
3
1
1
1
1
1
12

6
9
9

Total

2

5

6

3
3
3
3
3
3

Source: Hussain, Marketing of Agricultural Produce
In North India, p. 96, quoted *by Akhtar & others, op» cit,
♦Note: one rupee is equal to 16 annas, and one anna is
equal to 12 pies (Rupee s 3°«25 cents)
Some of these charges are not only heavy hut are unjust, since
they have nothing to do with the marketing operations.

Experiments con­

ducted in cooperative marketing have indicated that marketing charges
could he reduced considerably.

Thus, in the same market the total charges

through cooperative marketing were only Rupee one, annas six and three
pies per Rupees 100 of sales, or h0.6 per cent less than the usual char—

Heavy Land Taxation:
heavy "burden of land tax.

Another defect in the rural economy is the

This charge is imposed upon the poorest peas­

ant even though ha does not make any profit from farming.

The taxation

Enquiry Committee appointed hy the central government in 192^ to investi­
gate into the matter recorded that while

in some cases land tax takes

only a small fraction of the "net incomen of the cultivation, in other
cases it absorbs the whole of the "net income11, and even may exceed it#*^

Hussain, op. cit., p. 9 6
^Report Taxation Enquiry Committee 192U-25 (Delhi:
tions) , p. 77

Manager of Publica­

kl

We may take an exaople from the Panjab.

▲ study of farm

accounts for the period 193^ “ 39 revealed that where capital* land and
labor were supplied by the peasant and his family* the receipts of 29
holdings showed an average excess over expenditure of only Ri^pees 28*21
(almost eight dollars) during the year.

Where the land had to be rented,

capital borrowed and labor hired there was actually a loss* on the aver­
age of Rupee l*Ul per

year.

^3

iSae Land Revenue must be paid, however*

regardless of the lack of the income of the peasant.

Since the PanJab

Is a relatively prosperous part of the country* the situation in other
areas where the peasant farms on the average less than five acres* must
be even worse.
We have the testimony of Rushbrook Williams who observed that
"where rainfall is precarious and uncertain* the soil shallow and poor*
the income from all sources per head in a typical village has been calcu­
lated at about Rtpees 33 P er annum as against a minimum of expenditure
necessary for real needs in reject of food and clothing at Rupees U4
2h
per annum".
In view of these facts* it is no exaggeration to say that the
land tax in practice commonly is oppressive and is a tax on subsistence.
Furthermore, until recently* the land tax has been very inflexible.
Whether the crop was good or bad, or the prices received were high or
low, the demands of the exchequer did not alter*
23
V. Balasubamanian, A Policy for Agriculture. (Bombay:
versity Press, I 9 U5 ), pp.

Oxford Uni­

2k

Quoted by Kukerjee, Land Problems in India, op. cit.. P. 25

U2

Some writers hare attested to prove that the land tax has not
25
"been 'burdensome.
As an example, Thornburn and Darling, relying on
records of cooperative credit societies in India, have argued that since
only 15 per cent of the loans extended were contracted for payment of
the Land Revenue charge, this tax could not be a burden on the vast
majority of the peasants*

These writers, however, seem to forget that

the peasant does not always state his real reason for borrowing*
over, the land tax has to be paid on a certain fixed day*

More­

Since it is

a government charge which the peasant cannot dodge, in order to pay the
tax he sometimes has to sell food which he will need later during the
year.

Consequently, later he must borrow to purchase necessary food*

Seemingly he does not borrow to pay the land tax*

But if after paying

the tax he is forced to borrow for his daily needs, it is stretching
logic too far to conclude that the tax is not a burden because the peas­
ant does not borrow ejqpressly for that purpose*

On the contrary, heavy

tax burden is commonly regarded as one of the most important causes of
the poverty of the peasant* 27'
Lack of Credit Facilities; As we have seen, by and large, agri­
culture is not a paying industry in India*

Even in normal years the

peasant has difficulty in making both ends meet*

But should a natural

calamity, in the form of crop failure or death of his animals, overtake
him, the situation becomes grave indeed*

Ihen he is forced to borrow

from the village moneylender, usually the only available source.

The

latter commonly not only charges exorbitant rate of interest but also
25
Akhtar & others, op. cit., p. 179
26
----M. L* Darling, FanJab Peasant in Prosperity and Debt, (London:
University Press, 1932). P* ^-9
—— — — — —
27Paul K. Sueezy, op* cit*« pp. 3-5

Oxford

*3

practices osjay types of fraud on the illiterate peasant*
Of course, on account of the risk involved and the difficulty
of collecting the interest and getting hack the principal, the money—
lender is entitled to a higher rate of interest.

Actually, however,

the rate is out of all proportion to the risk involved.

In fact, before

the Panjab Land Alienation Act of 1901 was passed, his chief Interest
lay in involving the peasant in huge debt and then getting his land*
SSven today, although the law prevents the transfer of lend from the
28
peasant to the non-agriculturist moneylender,
an agriculturist money-­
lender (or even non-agriculturist moneylender by arrangement with the
former) can deprive a peasant of his land for nonpayment of debt*
In the Panjab in the year 1S35“3^ alone, 1^3,000 acres of culti­
vable land changed hands for nonpayment of debts.

Often this process

reduces the peasant proprietor to the status of a tenant*^

She fact

that total rural indebtedness for the whole of India had reached Rupees
180,000,000 Just before World War II, and that most of the debt is unpro—
70
duetive, indicates the seriousness of the situation**"
Too Many Animals; Like the pressure of population on the land,
the pressure of an excessive number of animals is very heavy*

The re­

sources of the country, In addition to supporting 3SS million people,
also have to feed one-fourth of the to tel number of livestock animals
in the world,

To aggravate the situation, as the Royal Commission dis­

covered, the number of bullocks (work cattle) per hundred acres farmed
*F§----------------In India people are classified into two groups as statutory agricultur­
ists and non—agriculturists* The former are those groups who have felloe
ed farming for countless generations* This* group enjoys privileges in
the matter of purchase of agricultural land, which are denied to the other
group*
BriJ ITarsin. India Before and Since tho Crisis, pp. 5^6-*^7
30
—
Balasubramanian, op* cit., p. 6

kb

is larger In the areas where the average size of land holdings is
smallest (Table XIV ).
TABLE XIV
SUMBSR 03* BULLOCKS III RELATION TD AREA CULTIVATED

Province

Bullocks
Per 100 Acres
Sown Area

Bombay & Sind
Central Provinces
& Berar
Madras
Bihar-Orlssa
Assam
Panjab
United Provinces
Bengal
Source:

Acres Parmed
Per Team

Av. Size of
Holding (Acres)

10

20.0

12.h

15
15
27

17.9

8.7
9*0
3*7
3*6
9*0

2T
16
29
36

13.0
T.k

7.3

12.8

3*k

6.9
5*6

2.8

Report Royal Commission on Agriculture in India* p. 182

In Bengal the aise of the average holding is smallest* yet
3engal has the largest number of cattle in proportion to sown area*
"The worse the conditions for rearing efficient cattle the greater the
"51
number kept tends to be."^

Since larger numbers means poor quality*

the peasant has to keep more work animals to get the same amount of
work that a smaller number of good animals could do.
vicious circle*

This starts the

Tor the greater the number he tries to maintain, the

lower becomes their quality* since he has to feed them from the same
restricted area.

Thus* where India supports 67 cattle per hundred

acres of cultivated land, Holland has only 38.

The result is that a

full grown Dutch cow* on the average, weighs twice as much as the
32
Indian* and yields ten times more milk*
31
Report Royal Commission, op. clt»* p. 191
32Ibid.

;

Another cause of the excessive cattle population is that large
numbers of useless old animals are maintained on account of the reli­
gious sentiment against killing animals.

It has been estimated that

the annual economic loss due to maintenance of such cattle amounts to
no less than Rupees 17^,000,000 or about four times the total income
from the lend t a x . T h e r e is further wastage because even useful plough
animals are not worked fully throughout the year, but they must be fed.
Except during the rains and other brief seasons, these animals do not

7ll

have much work to do.-'

Lack of Education;
economy of India.

This is another major defect of the rural

In the last census (lSUl) only 12 per cent of the

total population were classified as literates.

Literacy is defined as

the ability to read a post card in one’s mother tongue.-^

This 12 per

cent, however, conceals a wide disparity between male and female liter­
acy.
women.

The percentage of literacy for men is 19*5 while it is 5*2 for
Furthermore, the degree of illiteracy in rural areas is much

worse.
Chandrasekhar has estimated that in rural areas there is one
primary school for every 3-8 villages and that roughly one child out of
four attends the school.''

But the proportion of those who actually

complete the primary course Is much smaller.
most parts of India.

Education is not free in

According to an official report, more than four-

fifths of the children are withdrawn from school after a year or so be—

^ V e r a Anstey. auoted by Chatterjee, Indian Economics, 9th ed.. Part I,
p. SI, footnote.
Ambalal D. Patel, Indian Agricultural Economics, (Bombay!
Taraporevala Sons & Co•, 1937)
^ Indian Year Book (19^7)* P* 36

36.
chandrasekhar, op. cit., p. Hh

D. B

U6

cause of poverty or to help the parents in the fields or at home.*^
Chandrasekhar estimates that probably only one of every nine child7g

ren attending primary school goes to the secondary school•"
In addition to the woeful lack of education, there is the
religious philosophy which teaches the doctrine of Karma (according
to which the deeds in the previous life determine the course of the
present life).

As a result, we have the typical situation where the

masses, instead of making an earnest end concerted effort to improve
their lot, blame their Karma or the stars and resign themselves to their
Kismet (Fate).
Not knowing or not realizing the cauBal relationship between
certain facts, the common people look for causes in the impersonal for­
ces which run their pre-ordained course, against which nothing is of
avail.

VJbe unto him who dare resist the divine order of the universe.
Blind obedience to custom and tradition, together with the res­

pect for elders to which the growing child is subjected, kill all his
curiosity and questioning attitude.

By the time he becomes an adult

he is so well steeped in the past that he cannot think of making adjust­
ments to the changing world.
As a child he had been taught to believe that this world is
Mqya, an illusion, a sort of necessary evil through which he must go to
attain the bliss of the real life in the world beyond.

The more he

suffers in this world, the greater will be his reward in the life here­
after.

37
Education in India 1928-29. (Delhi: Manager of Publications, 1931).
quoted by Chandrasekhar, op. clt., p. UU

3^
Op. cit., p. UU

Consequently, he accepts the old customs end "beliefs end op­
poses change and new ideas.

He turns a deaf ear to the advice of

the agriculturel extension workers who advocate new methods of farm­
ing, or to the counsels of health and welfare workers who preach the
gospel of better living.

As if his ancestors were foolel

On the contrary, from the scanty means that the peasant has,
he spends lavishly on birth, marriage, and death and other social
ceremonies to ward off social stigma, and on religious ceremonies to
win the favors of his gods or to appease the vengeful deities.
Thus caught between the upper stone of high expenses and the
netherstone of low income, the peasant is doomed to a life of per­
petual poverty.

iv

i^z ■*■*<*t ^ Ww ••r
«/* wv—«._^«;>U.iJ
The
Indian

echo! : r :
of

many

economic

th-'

1 3 If, _ f

and

l e g i s.lr.tcr; •

^rpvity -.f t h e

o; ;eL the;. h : v e

enacted.

Sc:..? o f

bt. :• . f

gc\- . .

though

in c e X'to i n

r t : scii'i : j :

these

have

i.rve r e t

Pscrpec

a lon^ time t h e ; ,

ho:

hr v e

beer.

c-r. t h e

ctr-tutc
much

ore greet

are

u

c;;,

legislative
lo ok,

err b e
of

reforcs.

new,

headway

p r o g r c cc o l e :

trie n o t i c e

which,

of

i ^ . v e l e e r : ke cr.ly

ndvoc&tec

ir. getting c e r t ; i n

o r . *.;'.c- v v . o l <r, r e t

direction!
elov

life

problem . - - a

succeeded

;!'/ ve r ,

thi f

rur' 1

In

measures

for

I,*?,e b e e r

a nttmnc-.de,

discerned.

The

the

following

seeiu

net

really

sic re I n r p c r t r . r . t ,
fne T r i t i s h

£"0

ir: I n d i a n . n c t i o r . a l
ward s economic

dominated

v.elf : - r e .

i'cforc;

.ill

government

along

soncti...e:

z nC

It

\:i- a

had

- c tun.ll:

r> l u k e w a r m

interested

attitude

to—

policies d e t r i ­

followed

m e n t f. to tl ‘ Interests of the people.
( 1)
v-j.o h.- f

Some

;• t v . d i e d

tV. f I r -

r o o 11 i r

-jcv.ll

not

got

of

the

tcher.cs

ro.rr.1 l i f e
the
;

o.il.

real
derl.

^e- rv.rec

-ere

o r . l y f r c r . i ’’o u t r : i d e M .
hven

ir. o i g h t
The

r:

vd. t h

the

int . the

meet

c . -- t o

r e . t d l t h. o b e e

either,

n c \'.l? n c t be i n t r c d u . - e c , c r ..ore h o r e c

They

did

by

people

net

have

pious intertiens

they

'ffrirc

e v i l s.?

prepared

vlth which

ircprrc t i e d
to

they

cere

set cures,

failure

w.ich

it t h e - v e r y

- ^ -.4u**
.

(c;
~ ^ - l'~ e

Ir: s o m e

c : <-c : r.r- t u r

° V 1;) e p i d e m i c s

1 ft rr

sr.d f . m i n e s

_• h ' v c
have

not beer

upset many

c r pcrr.tive,
a program.

(d)

Not a few reforms have met stern resistance on the part

of the people who , on account of ignorance, religious and other preju­
dices, have failed to see the value of these measures*
(e)

Many of the plans have been one-sided.

They dealt too

exclusively with one aspect of life, whether health, economic, social,
or political*

The reformers and legislators have overlooked the fact

that life*s problems cannot be solved piecemeal*

In order to be suc­

cessful, genuine reforms must touch the whole life of man.^
(f)

Most of the measures have been too narrow and superficial*

They did not strike at the root of the matter and so the evil has per-

p

sis ted, some time under disguise***

A detailed study of the important measures of reform will show
how such efforts are bound to fail unless they aim at removing the basic
evils of the economy and social organization* >

We may study these meas­

ures under two heads, viz*, the individual legislative measures designed
to deal with specific problems, and the official rural reconstruction
programs aimed at Improving the general conditions of living in rural
areas*
Individual Legislative Measures
The number of such laws, with their amendments enacted in the
light of further experience, is considerable*

1---------------------------

They vary in scope and

D. Spencer Hatch, Up Prom Poverty In Rural India, (Madras:
University Press, 195*77“P V
--------------2
T. Singh, op, cit., p, 15
3 Ibid.. p. 17S

Oxford

50

design, from one province to another, to meet the particular require­
ments of these regions.

However, we shall discuss certain of the more

progressive lavs by which specific economic reforms have been attempted***
Consolidation of Holdings Acts
The Pan jab Consolidation of Holdings Act of 193^ provided for
the formation of voluntary associations of peasants desiring to consoli­
date their holdings.

They could pool their several holdings and pre­

pare a scheme for a new allotment of the lands which must be acceptable
to two-thirds of the members.

The aim is to give each member, in one

or more blocks, land very nearly of the same quality which he has con­
tributed to the pool in scattered parcels.

In 1939 0X1 amendment pro­

vided that two or more land-owners having a certain amount of land, could
apply to a local government official to prepare a plan for consolidation
of their holdings.

Consolidation was to be undertaken if two— thirds of

the owners, holding not less than three-fourths of the cultivated area,
agreed to do so.

Provision was also made for compulsion should a small

minority stand in the way of the majority*

In addition, the Panjab

government agreed to bear the expense of the staff needed to effectuate
the consolidation.
An even earlier attenqpt was made by Bombey Legislature in 1927
to enact a Bombay Small Holdings Bill aimed at preserving economic sized
holdings through preventing further subdivision of land.

But it met

with great opposition and did not become law.

n---------------------------

Most of the following discussion is based on Nen&vati & Anjaria op* clt*,
Brij XTsrain, India Before and Since the Crisis, op. clt*

51

Thus, the only effort in India to deal with uneconomic boldines
has been made through consolidations of small parcels belonging to each
peasant.

The achievements of this law in the Panjab can be seen from

the following Table.
TABLE X T
PROGRESS MADE BY COOPERATIVE CONSOLIDATION OT
HOLDING SOCIETIES (PANJA3)

No. of Societies
No. of Members
Area Consolidated
per year (acres)
Source:

1936

1937

1938

1939

1,210
103,582

1,270
119.875

1,360
1^1.929

1.^77
160,782

92,689

120,295

132,313

157.211

franavati & Anjaria, op. clt., p. 152

The total area consolidated b y the end of October ljhl was

1.300.000 acres, which is considerable.

5

However, in the Panjab, owing

to homogeneity of the soil and simplicity of the tenure, the task has
been simpler and success greater than could be expected in other parts
of the country.

c

Thus in the United Provinces, in about 13 years, only

67.000 blghas or 33.500 acres were consolidated from 75.965 plots to
7.599 plots.7

In the Central Provinces, however, 133.000 acres split

up in 2,1+33,000 plots were consolidated into 361,000 plots.®

This ex­

perience in the Central Provinces shows what may be expected from great-*
er drive and effort on the part of those interested in the consolidation
movement.
. ,,
^Akhtar and others, op. clt., p. 153

6

Report Royal Commission, op. cit., p. 139

7Nanavati and Anjarla, op. clt., p. 153

8Ibld.

52

The success of consolidation is fairly impressive.

Although

the exact benefits accruing to the peasant as a result of consolidation
cannot be assessed, precisely, yet there can be no doubt that it must
have meant a considerable gain to the cultivator.

However, this type

of reform program is open to certain objections.
(1)

Consolidation affords only temporary relief.

Upon

the death of the peasant, his holdings are divided among the heirs,
thus leading again to uneconomic holdings and fragmentation.
vii)

The consolidation program tends to make people oblivious

to the need for more fundamental changes which are essential to make
agriculture a profitable undertaking.
(iii)

In a large number of cases even the consolidated hold­

ings may be below the optimum size.

Therefore, those who are in most

need of help would not have their situation improved very much.
Thus, consolidation of holdings, while it does provide much
needed relief, is a temporary expedient and does not provide a satis­
factory solution of the problem of uneconomic sized holdings.
Tenancy Legislation
Many tenancy laws have been enacted which vary in content and
scope from province to province.

The Bombay Tenancy Act of 1939 may

be taken as an Illustration of the general lines on which tenancy legis­
lation has been attespted.

The folio wing are the main provisions of

this act.9
(a)

Unless settled by agreement between landlord and tenant

or by local usage, what is a reasonable rent shall be determined by a
local government officer in accordance with a specified procedure and
principles.
^Nanavatl and Anjaria, op. "clt., p. 139

53

(to)

Freedom from eviction is guaranteed except when the tenant

fails to pay arrears of rent and Land Revenue, or sublets the land,
causes injury to it, or uses it for non-agrlcultural purposes*
(c)

The Act requires that in case of ejection, the tenant shall

toe compensated for improvements he has made.
(d)

Continuancy of tenancy toy the heir after death of the ori­

ginal tenant, on the same terms and conditions is assured.
(e)

The tenant is protected from illegal exactions toy the land?-

(f)

The Act provides automatic and proportionate reductions in

lord.

rent payments when there are reductions in Land Revenue toy the govern­
ment.
In short, most of the recent tenancy legislation in Bombay and
other Provinces aims at "three P's," i.e. fixity of tenure, fair rent,
and free transfer to tenants.^®
It is evident that such tenancy legislation attempts to remove
some of the outstanding evils of the system of landlordism.

However,

it fails to meet the requirements of the situation for various reasons*
Firstly, in practice the amount of rent is left to toe deter­
mined toy agreement between landlord and tenant.

Since the landlord is

usually in a position to dictate terms, the tenant must accept the terms
of the landlord or starve*

Thus the law does not achieve its objective

of preventing unfair rent charges.

Nor is the determination of rent

by local usage a satisfactory method.

1QItoid.. p. 139

Customary rents are usually high

5>*

because of the coaq>etition among tenants to get land as that Is the
only way open for them to earn their living.
Secondly, the legislation rests on the assumption that the
tenant can earn enough to be able to pay the land tax, the rent and
other charges and still have sufficient income to maintain himself
without running into debt.

But studies of farm accounts in the Fanjab

show that this is not true, even for Byallpur which is the most pros­
perous part of the country.

The situation in this respect in other

places is very grim indeed.
Finally, this legislation assumes that the landlord system is
sacred and is socially Justified and that nothing needs be done to re­
move the inequities and evils of the system which has been so commonly
condemned by students of the tenancy problem.
It seems, therefore, that something more fundamental than
tenancy laws is required if the condition of the tenants is to be
improved significantly*
Marketing Laws
The Panjab Agricultural Produce Markets Act of 193$ Is the
most progressive legislation of this type in the Provinces of India*
It aims at removing the dishonest practices and unjustified exactions
to which the peasant was subjected when he took his produce to the town
market in hope of getting higher prices than the village Bania (money­
lender) would offer*
The law can be applied to any market area upon notification by
the Panjab government.

After the notification all sales and purchases

of agricultural products must take place in licensed places, by licensed
dealers, brokers and middlemen*

55

The Act further provides that every market will he administered
by a committee, two— thirds of whose members shall he selected from
growers.

Not more than three members may he nominated by the govern­

ment, and the rest are selected by the businessmen.

This committee

is empowered to levy fees on agricultural products bought and sold by
the licensees.

Fees may be imposed to raise funds for the following

purposes!
(a)

maintenance and improvement of the maxket,

(b)

provision and maintenance of standard weighte and measures,

(c)

collecting and distributing of information regarding market­

ing and crop statistics,
(d)

providing conveniences and comforts for those who use the

(e)

regulation of the marketing charges*

market,

The Act has brought a long over-due reform in agricultural mar­
kets where the peasant typically is so much at a disadvantage in dealing
with the well—organized traders*
However, the Act does not go far enough.

It makes no provision

for 8 to rage and warehouse facilities where the peasant could store his
produce and receive advances for his immediate needs.

As it is, the

peasant has to sell his produce immediately after the harvest at what­
ever price he can get at the time.

He must have money for the payment

of the land tax on a certain day as this cannot be postponed without
his getting into trouble.

Since storage facilities are lacking, all the

peasants have to sell at the same time.

This aggravates the situation

by bringing down prices in consequence of large supply*
Nor has any provision been made to improve transport facilities.

56

The lack of cheap transportation, is a very serious obstacle in the way
of successful

marketing*

Whatever advantages the control and super­

vision of markets will bring can be enjoyed only by a limited number of
peasants who can take their produce to the market*

But the poor unfor­

tunate ones, who have neither the carts nor the strong animals and who
need more help, will not be benefited*
However, even with its limited scope, the Act is meeting with
stiff opposition on the part of the traders.

Only time will tell whether

it is successful in achieving even its limited objectives*
Land Bax Reform
The most outstanding change in land taxation has occurred in the
Panjab,^ with the introduction of what is known as the sliding scale
system.

The objective is to render the land tax charge elastic and

flexible in relation to the prices of agricultural products*
Briefly, the system is that on the basis of prices of the agri­
cultural products during the previous twenty years, "commutation" (aver­
age or standard) prices of agricultural products have been established*
These "commutation" prices will form the basis of the "average" (or
standard) Land Revenue charge, \&ich will be so many riqpees for each
acre of a particular crop*
From this standard or average the Land Revenue charge will be
calculated, taking into consideration the type of land and other factors
Influencing the income of the landholder*

Thus for each acre of any one

crop, two holdings with different fertility or income yielding capacity

lT

The following discussion is based on the Report of the Fanjab Land
Revenue Committee (Lahore)

57

(depending on situation, good water supply, good climate, etc,) will
pay different rates of tax.
Once the commutation prices have been computed, the basis of
calculating the Land Revenue charge will not be changed before UO years.
The rates of land tax confuted on this basis represent the maximum that
may be imposed by the government.

These maximum rates, however, will

not be charged unless the actual price level of agricultural commodities
is equal to the "commuted* prices,
^he Land Revenue charge would be reduced in proportion as the
market prices were lower than the "commuted" prices.

But in the event

market prices are higher than the "commuted* prices, then the peasant
is not required to pay any increased land tax.
The new system introduces a much desired flexibility into the
tax structure and removes one of the causes of hardships.
not go far enough.

BriJ ITaraln finds two flaws in it,

12

But it does
Firstly, it

does not take into consideration the cost of cultivation.

It is argued

that prices of agricultural commodities is only one aspect of the income
problem of the peasant; the other beirg his costs of production.
Generally when prices of agricultural products fall, costs do not fall
in the same proportion.

So while the reduction of the tax demand in

proportion to the fall in prices should be very helpful, much of the
advantage may be lost b y costs remaining at a higher level.
Secondly, Brij Narain holds that it 1m inequitable to tax land
at the same rate regardless of whether it is used by a tenant or peas­
ant proprietor, since the tenant must also pay a heavy rent,

12

r .
India Before end Since the Crisis, op. clt., p, blh

A tax

5«

rate which may not he Oppressive for a peasant proprietor who hike no
rent to pay, becomes burdensome for the tenant.

Other economists feel that It is wrong to fix the amount of
tax demanded in any one year on the basis of the prices in the last
year (as is done in practice), since the current prices may be very
much lower as compared to the previous

y e a r ,

But the most important objection seems to be that the system
assumes that every peasant, whether owner or tenant, makes some profit
no matter what the prices might be,
assumption.

This, however, is an unwarranted

As we have seen already the study of farm accounts shows

that even in the most flourishing part of India, the income of the
average peasant is barely sufficient to make both ends meet.

So in a

v&Bt majority of cases, under the present situations, the land tax is

a tax on subsistence

lU and as such has no morel or sociel Justification.

Especially when nan increasing chain of rent receivers who eat up the
15
profits of agriculture go scot free".
The argument that every citizen of the country must be taxed
to make him feel the responsibilities of citizenship, even though he
should go hungry, seems to be preposterous,
Agricul tural Credit

The problem of rural indebtedness was the first to be realized
by the government.

The scarcity of credit facilities in villages and

stories of the moneylender charging exorbitant rates of interest, with

^Akhtar and others, op. cit., p, 276
Report Indian Taxation Enquiry Committee, p. 82

15

Mukerjee, Land Froblems in India, p. 29Sf

ro

c o n - . . f - . p rJi. t l c c i. o f
v; i i o v . j o e

u v i - - u- t.

Fhv.u t h e

:o>:r.t l i. o-r h

' c-r.c o f

he? 1

Lar.d

ter::. c r e d i I f r o r a

r.:*;.;-p.: r 1. i :

t:»€

ox*ovlncial

J ” pt'-io

iicerrhin

■ni
of

lom.s.

this

. ' . e h ; 0 p u r ch.- 4iC- o f

if-cc,

Ir'-.x-,. t 1;
or

0t i l l e d

loo

cent

t.

to

o n;

ri_i

ity

f

hi_

supply

other
Hie

r.t,

h. v e

x-t

1f i t ; .

to

the

di

not been

_

^

1

I f '"4 v a e

t r e ■ rv. r o

icr.£
iaiprcvc—

iaro i'ove_rr. t

nrtxinoun p e r i o d

of

f f ic-il t if-i o f p r o c e d u r e
’i t l i i n c ;

. rc-

for

de sign e d

for current

to b e

hejrv -rtr.

Credit

to

Thoce

too- u s e

A c ‘, ; f

to

to

m y

con-

repaid
locr.e

supply

thort

a g r i c n l t u r r-1 n n c d s

Cat tie.

rr.C

ot

T h e r;.te

the

too

rent

of

an s i n

h;*ve- r . o t "beer.

r e - a s c - n o z s> a b o v e

the

v.-o.'b. :

u.eiLbe-:c.

C - .

h

for.;.

F u n d s r i’t

io£-r..

C ^ . . .

p *

1 1'-^

of

m e

*- e n a c t e d

rurel

by

re

due

e l st

the

t..e r c e v l t o f
Mi-drrc g o v e r n ­

ir.cleb t c d r . e - o t .

i h ' c i ‘-er. I : . r . i : r i r . G e n s a r y

"Hind

p r c - v i c-ion so f

per sou v nr;

1^0*.-

0 rppolrtcd

the prctlor

vorkitit of

ii. t \ c

— :i •••:-. /..<• 1 r / v i

t . r ■ - * . t - 1'

of

ITicholscn

report

t e I. ■

c ex. i ' c f ' ; .

Aj

to

collection.

r-dution.

A c cc r h i n ^

rr

of

the c u n e r * r r te o f i n t e r e i t .

is

the

i.ct

trie l o o n .

extent

iooperetlvt

f 1 1 :v a

h r- sus.-..:./

on'

fcr e a t

sauch ii:rrc::,ed b y

HI---,

f

m y

lord.

lsr; l e n i e n t t , - r . u u r c

t-..c m a i n

fiu-'ir.v r o f F .

ment
so

very
the

The
the

the

charged

.-^i-icultvrict hoar. . x t
prc vincic-1

the-

l:x'.c , o r

of

rate

t e r e s l o r s r . c f x*cai t h e

to

tc-ught

i n nevi-ice for icakiny perorr.crt

igr.c r: r.ce
r.dev

errctitm

e:cte:.t.
H.e

harvest

:f

L u i i df r

the

the

.. i t u - t i o r * .

the r o r . t r - 1 v r l i e

to

i

p e r . ; : . 1;, - e “

I i r . p r o v e a . c n ..cJ

the

or. : c o o u r . t

r.d v ' t '

‘. : X

a -i t -

. _ c ig,c i n . j . / c l 1

the t vc u i * v h '

H e v m ,

the

the

He

wan

that

T h i f f ci rc i : " / ^
Cooper;: tivc

.'c-opcrr t i v r

C r e t e i t ..ct- o f

society

obt-ine.’ iron

.-fit-

to o v o o l y
of share s#

the

6o

deposits or locns from the central cooperative banks which were to be
established to finance these societies*
more than one— sixth of the total shareb .
Rupees 1,000.

No single member may hold
Nor could his shares exceed

Every member has only one vote.

The amount of a loan

suet not exceed a certain per cent of the value of the property of the
borrower*

Furthermore, every loan shall be protected by two co— signers

as sureties*
In order to encourage the growth and development of these
societies, they were granted certain privileges.

The most important of

these were, (a) exenption of the shares of the society from attachment
for private debt of the members, (b) the society had priority over
other creditors, (c) the society was free from income tax, stamp duties
and registration fees*
Prom time to time various amendments have been made in the
provisions of the Act, but the fundamental principles remain the same*
These cooperative credit societies were expected to supply long
and short term credit to the peasant at a low rate of interest, to be
repaid in easy yearly installments*

It was expected that this would

solve the problem of rural indebtedness, provide good training in self
help and thus save the peasantry.

But the ideal has not been achieved*

In 19^2-1+3 the total membership of these cooperative credit
societies was only about 6,900,000, which is very low considering the
total rural population**®

IS

In 193^- Sir Malcolm Darling found that 2b-

Statistical Statement Relating to Cooperative Movement in India*
(19U0-lll), Reserve Bank of India, quoted by Akhtar and others, op*
clt., p. 197

6l

per cent of the total number of societies since the beginning of the
mo Yemen t had gone into liquidation.

Another distressing feature le

that in four provinces UO per cent end in three provinces about 25
per cent of the societies fell under categories D and I (bad and
hopeless).

Only 10 per cent in six provinces fell under categories

A. and B (very good and good).3^
'whatever be the reasons for this sorry state of affairs* it
is clear that the cooperative credit movement has belled the hopes
of those who had expected to solve the problem of rural indebtedness
in thi s way*
This is because it did not go to the root of the trouble.

It

is not simply a question of creating machinery to supply credit to
the peasant v/hen he needs it.

The real problem is to create conditions

so that he does not have to borrow for unproductive purposes* since
most of the debt is of that nature.

Everywhere during the writer's

survey of villages in different parts of the country he was told that
the peasants borrowed either to pay land taxes* to repay old debts*
to replace dead animals* or to celebrate the birth* marriage and death
ceremonies.

Hone of these types of debts add to the productive capa­

city of the peasant.

Other investigators have reached the same con­

clusion.
The basic solution of the rural credit problem existing in

India* is to create condl tion^ first, so that the peasant does not
have to borrow for unproductive purposes, and second, that when he
does borrow there is a good chance of his being able to repay the loan
within a reasonable period of time.

» PP. 200-201

In other words, he must be assured

a certain income over and above the minimum needs of his family*

Until

that is done no plan of rural credit is likely to be effective.

On the

contrary, easy credit may prove to be the cause of his ruination.

This

actually hapjjens in many cases, where the personal property of the
peasant is auctioned to recover the loan.

The writer has seen this

happen before his eyes.
Some other measures, which do not aim at supplying credit, but
are designed to protect the debtor may be exemined very briefly.
Die Pan jab Land Alienation Act of 1901 provided that the nonagriculturist moneylender could not acquire the land of the peasant
for nonpayment of the debt.

Though this has been effective in many

cases in preventing the land of the peasant from going to the money­
lender, yet in a large number of cases the moneylender found a way to
circumvent the law.

He made arrangements with an agriculturist money­

lender so that while it was the latter who acquired the land in default
of the debt, the income was to go to the nonr-agriculturist moneylender.
In fact the situation became so scandalous that the panjab Government
had to outlaw such benaml transactions, as they were called, under
Amendment II of the Land Alienation Act.
Another flaw in the original law which permitted the acquisition
of the land of the peasant by the agricul turist moneylender was that
the latter could acquire huge estates by reducing peasant owners to
tenants.

This has been removed also by Amendment III, which now debars

an agriculturist moneylender from acquiring the lend of the peasant in
satisfaction of debt.
Two more laws have been enacted to prevent dishonest practices
which had become proverbial with a large number of moneylenders.

Die

$1
Regulation of Accounts Act of 1930 requires the creditor to keep regular
accounts relating to each debtor.

The Act also requires the creditor

to send semi—annual reports to each debtor, showing the standing of his
account.
Under the Registration of Moneylenders1 Act every moneylender
is required to obtain a license.

The latter can he forfeited if the

moneylender indulges in dishonest practices, such as defying the pro—
visions of the Regulation of Accounts Act. or making entries for a
greater sum than he had actually loaned, or for violation of the pro­
visions of Panjab Relief of Indebtedness Act regarding the rate of in­
terest charged.
The Panjab Relief of Indebtedness Act of 193*1 provides that a
person owing more than Rupees 250 can apply to the courts to be declared
insolvent.

The court also is empowered to rule whether or not the rate

of interest Is excessive.

But the most important provision of the Act

is the establishment of Debt Conciliation Boards*
The chief aim of these Boards is to adjust the available assets
of debtors to their total debts and to facilitate repayment in a reason­
able period through yearly Installments*

The creditors who refuse to

agree to the Board's decision are placed under certain disabilities in
recovering their dues, while the claims of those who accept it are given
priority*
Rural Reconstruction Programs
The central idea of these programs is to imbue the villagers
with the ideal of dignity of labor, the dignity of women, the dignity
of cleanliness, the dignity of service by means of example and percept—

intense propaganda aided by laughter and song.

2n

She program is made up of action along three lines, viz., the
material, intellectual and moral.
Materially it seeks to improve the health and raise the stand­
ard of living of the agricultural class. The former is achieved
"by encouraging better sanitation and by provision of medical
aid. To realise the latter, better methods of cultivation,
finance and marketing are popularised. As regards mental and
intellectual aspect, education facilities are provided for
boys, girls and adults. Information and instruction is also
made available through the radio, cinematograph, and lectures
and demonstrations by touring parties.
The moral aspect, how­
ever, is the most fundamental. It seeks to awaken the will of
the villager, to make him conscious of the value of his personal­
ity and individuality. It aims at creating in him the desire
for self—improvement and self-discipline by individual action....
In a word, to change the entire outlook on life m
All this is necessary because nno substantial improvement in
agriculture can be effected unless the cultivator has the will to achieve
a better standard of living and the capacity, in terms of mental equip­
ment and of physical health, to take advantage of the opportunities which
science, wise laws and good administration may place at his disposal.
Of all the factors making for prosperous agricul ture, by far the most
22
important is the outlook of the peasant." '
The following table showing the amounts allotted and expenditures
incurred on different items, out of the Government of India grant, will
at one glance show the nature of the work undertaken by the Official
Rural Reconstruction Programs.

Though there is great diversity in the

details of the programs in different provinces, yet the purpose and scope
are more or less common.

^ V e r a Anstey, op. clt., p. I83
Akhtar and others, op, cit., p. 22S
22
Report Royal Commission, op. clt., p. So

TABL2 XVI

sxpskdiotbss o» rural rscoxtstruc tics programs (19U0-U1 )
(Thousands of Rupees)
Allotment

Item

1. Village improvement schemes through
cooperative dept. & district offices... 829
2. Rural Water Supply(drinking)
kU6%
3. Rural Communication
2382
970
k. Rural Sanitation.......................
5. Rural Health........................... 1172
6 Industrial schemes
3^+5
92^
7* Agricultural Improvements..............
S. Establishment .........................
208
9 . Consolidation of Holdings............... 1+11
10. Debt Conciliation ....................
100
11. Improvement of Livestock................ 1+60
12. Veterinary.............................
93
13. Improvement of poultry.
11

Expenditure

790
3936
1931
5^7
1121

.

296
887
208
^11
100
1+95
91
11

ll+. Propaganda

667

667

15 •
16.
17.
IS.

582
*+26
685

I+36
351
703
--

Welfare Schemes........................
Miscellaneous ........................
Discretionary Grants
Unallotted Reserve...................
Total
Sources

1+66

11*796

129 Si

Nanavati and Anjaria, op. clt., p. 2l+l

Prom this picture it is evident that this program aims at remov­
ing many of the distressing sysg>toms of rural poverty through an intens­
ive educative process in the matter of health and better living.
Rut the actual results achieved are very disappointing.

If P. L<

Brayne, the pioneer In rural reconstruction, were to visit the Pan Jab
villages which were the pride of his mission, he would be sorely disap­
pointed.

The whole life work of this official seems to have disappeared

into nothing with his departure.

23

In other parts of India the success

of rural reconstruction programs has never been very remarkable.
23
T. A* Raman, Report on India, (Oxford University Press,

p. 99

In the pan Jab Mr. srayne was able to achieve an apparent miracle
because of the prestige he enjoyed as a Deputy Commissioner (Dietrict
Officer)*

He was able to get action without the people realizing the

value and importance of what he was preaching* The people obeyed him
while he was at the helm of affairs*

Hut as soon as he disappeared from

the scene, the villages relapsed to their original state*
The writer, who has a personal knowledge of the areas where
miracles were supposed to have been achieved, feels that some of the
changes were very superficial and that statistics based on this experi­
ment can be very misleading.

Akhtar and others, too, are of the opinion

that ’’this work has not brought about a significant change in the village
2k
or the outlook of the villager11.
If nothing else, Mr. Brayne's work should be a s t e m reminder to
all who are interested in improving the well being of the people of India,
that it is impossible to achieve any lasting results without removing
the basic causes*
To quote a few exaiiples, while every effort was made to see
that the village water well was free from infection, it did not help
very much, for the peasant drank from the open ditch when he felt thirsty
during his work in the fields.

Similarly, while emphasis was laid on

ventilators in the rooms, no provision was made for preventing dust and
thieves getting into the rooms.

Similarly the propaganda regarding the

use of mosquito nets or artificial fertilizers could be of no avail
unless the peasant had the money to buy these things.

Hanavati

Anjaria seem to be right when they say that "unless the fundamental
issues bearing on rural welfare such as land reclamation, adequate irri­
gations! facilities, planned consolidation of holdings, a rational system

67

of lend tenure and tenancy, an equitable basis of land assessment*
etc*, are tackled, nothing appreciable would be achieved by the recon­
struction work of the type which is conducted at present."2^
Another defect in the program is that it is not based on a
comprehensive survey of the needs and requirements of the different
areas or the careful consideration of the long-term adjustments that
are necessary to assure lasting results,
55-------------------------------

Nanavati and Anjaria, op, clt,, p. 21*8

CHAPTER T

HBE9 K)R

n m

approach

Ve Have seen that various measures adopted in the past to
deal with, the problems of rural economy of India are of the nature
of temporary palliatives.
fective.

Evan as such they have not been very ef­

Therefore, it has been suggested that in order to achieve

any substantial result* more drastic and thoroughgoing measures are
necessary.

T. H. Ramaswamy. for instance, feels strongly that "there

can be no real improvement in the economic position of the cultivator
without drastic reconstruction and regulation of future economic
evolution*Another competent economist observes that the "first
prerequisite of a genuine social advance is a drastic reform of the
land system"*2

While p. Spencer Hatch, who spent a large part of his

life working for the tqplift of the peasant in South India, feels con­
vinced that "the Indian villager is not orach benefited unless he is
helped simultaneously in every phase of his life and in regard to every
relationship he bears to others"*^
In fact, in 1939 the national Planning Committee headed by
Jawahar Lai Uehru actually started to prepare a blueprint of national
planning believing that nothing less than a comprehensive over-all
planning could be really effective*

The work of this committee was

Stabilization of Indian Agriculture. (Benares:
?Paul M. Sweesy. op. clt., p. 5
p. S

68

Hand Hi shore Bros*, 19^6)

69

upset 'by a change in the political situation.

However, soon afterward

a group of well-known industrialists headed by Sir p. lhakurdas came
out with a 15—year "plan for Economic Development of India",** It was
followed by M, N, Roy's "People's Plan""* with a slightly different
approach, but the same end in view.

Chen there are the government

"plana"
Chough the economic air in India seems to be thick with "plans",
and many people believe that "planning" is fait accompli in India, yet
it is also true that these plans have aroused considerable controversy
and opposition on the part of those who have faith in "free economy".
It would be well, therefore, to examine both points of view before a
definite approach to problems of rural India may be accepted,
Por some thinkers the opposition between planning and 1aisseefaire does not exist.

They argue that strictly speaking all economic

life involves planning, because it involves the disposal of scarce
goods.

And the disposal of goods, insofar as it is in any way purposive,

necessarily involves some kind of plan.^

The so-called "free enterprise"

system is actually under the control of innumerable small plans, formu­
lated by individual business men and households, as well as big corporations.

In fact, it is argued that planning is not a revolutionary

Sir P. Thakurdas, A Brief Memorandum Outlining a Plan of Economic
Development for Indid, (HIV ToHg— Penguin SooS sT
---------^0. P. Prikh and M, N. Boy, Alphabet of Fascist Economics, (Calcutta!
Renaissance Publications, i g W 7 —
■

Jisfggsgf?la

(Delhi‘ *11-’1
''v

L* Sotoblne. Scononic Planning and International Order. (London* Maomillan 1 9 3 7 ).~pT^---------_E, R. Burrows & J. K. Horcefield. Economics of Planning, (Philadelphia!
The American Academy of Political SCfibaer,ig3g7;-p"."3’ ^

70

departure In human life.

Tor "it is a logical category of any action

having its future development along lines traced by the reasoning powers
of the Individual concerned and by the opportunities offered by his
environments*
It seems* therefore* that those who are opposed to planned
econony are not so much opposed to it as "planned"* but to its political
and other implications* particularly the loss of individual freedom*
or ruthless dictatorship which seem to be Inherent characteristics of
planned economy as evinced by fascism* nazilsm and communism.
However* those who advocate planning insist that planned economy
does not mean the adoption of totalitarian ideologies.

33iey insist

that economic planning is one thing and political structure another*
and the introduction of one does not necessitate a fundamental remodel­
ing of the other.*®

They further argue that when the critics of planned

economy decry the regimentation it would involve* they forget that the
extent of regimentation that exists in the industry today was unknown
in any previous society.**

Of the working population in the U.S.A.»

70 per cent are regimented in detail at least eight hours of the work­

ing day.*^

Besides* how much real freedom* under unequal distribution

of income in "free enterprise" society* actually exists is usually over­
estimated.

Tor instance* a person's freedom often is extremely limited

in the matter of choosing an occupation* or its location, or in the

&• U. Papi* Introduction to Post War Reconstruction Programmes* (Homes
International Institute of Agriculture,
p. £39
*°Barbara Wootton, Plan or No Plan* (New York; Parrar and Rinehart* 1935).
P* 313
11

L. L. Lorwin* Time for Planning*
Ibid.

12

(New York:
*

Harper Bros.. 19*+5)* p. 58

71

purchase of things he wants* or in starting an enterprise in the face
of powerful monopolies.
Thus the advocates of planning contend that, if planning is
divorced from political organization, in the matter of individual
freedom it does not and need not compare unfavorably with "free enter­
prise" system.

While with regard to economic efficiency, it is alleged

that planning is decidedly superior.

Bie planners are willing to ac­

cept the achievements of laissez-faire in the matter of volume of pro­
duction and in bringing about a degree of material comfort unknown to
mankind before under any other

system.^3

But they argue that the re­

current fluctuations in the volume of production and employment that
go with laissez-faire entail sttqpendous loss and human misery.

In the

United States alone, during 1931-39 the people suffered a loss of $250
billions in income which they might have received if prosperity had not
broken down.!** And if we calculate the loss to the world}
Thus the critics argue that the automatic mechanism of free
economy has belied expectations.

It has failed to insure anything of

the nature of the inspired and beneflcient
believed to be its strongest point.

equilibrium,*^

which was

It has failed to bring about the

best allocation of natural resources by the free working of the forces
of svpply and demand through the automatic pricing system.
Free enterprise has led to a wasteful opening of oil wells
when oil has not been needed. Free coupetltion has led to
exploitation of the seams of coal easiest to get at since
costs were cheaper— hence a wasteful abundance of coal in
partially exploited mines. Exploitation of agricultural
C. Mitchell, "The Social Sciences and National Planning". Planned
Economy, (ed) Findlay Mackenzie (New York* Prentice 2811,1937)7"p.1<!0
Dt
1 9 ^ 5 SteT l^wles* ^omorrov Without Fear, (New York: Simon & Schuster,
15,
Mitchell, op. clt.. p. 116

land meant cutting down of forests, the increase of floods,
and denuding of semi-arid lands, leading to ultimate destruc­
tion through soil erosion*1”
The advocates of free economy, however, argue that it is not
the system which is at fault, hut rather the wage and other rigidities
introduced into the economy for one reason or another*

Bobbins, for

example, argues that the ^rstem "has not failed because of any inherent
defect in the system, hut because of the ill-conceived measures which
have been adopted to set it right* *17
But the opponents reply that the introduction of rigidities
itself is a proof of the inherent weakness of the system*

It fails to

achieve the equilibrium and perfect allocation of resources through the
pricing system, because inequality of wealth distorts the process of
human satisfaction*

The wants not clothed in money remain undetected,

ineffective and unsatisfied*

18

Moreover, in actual practice choice is

not free because of advertising and similar practices by which people
are induced to alter their choices*^

On the production side, mono­

polies and huge combinations distort the production pattern, and in
their efforts to maximize profits pay little attention to the general
welfare*

Furthermore, production is designed for profit regardless of

whether it is harmful or beneficial to the consumers or the community
in general*^

However, it is contended that the most serious weakness

...........................

■re

—

W. F. O^bura. "Invention and Sconomic _3ontrol':, Planned Scono&or,
Findlay Mackenzie (ed), op* cit«, p. 9 9 6
17

L* Bobbins, The Great Depression, PP* 59-^1
^Burrow & Borsefield, op* cit*, p* 6
19
20

Ibid.
Ibid.

-----

73

of lsissez-frJ.ro is that it is accompanied by poverty amidst plenty*
91

People starve in the midst of potential or even actual abundance* *
Therefore, it has been suggested that if we do not"plan", the
alternative is status quo vith its constant threatofuneiqployment, its
poverty, its destruction of basic necessities of life so as to keep
prices at the level of vendability, and finally, the last resort of
Op
every economy in distress, war between nations*
nevertheless, before the issue can be finally decided, it would
be necessary to answer three questions:
(a)

Whether Intelligent steering of the wheel of our economy

in the form of an over-all coi^rehensive planning is at all possible!
(b)

If possible, is it desirable!

(c)

If not, what is the alternative!

With regard to the first question it has been suggested that
Russian planning should convince anyone regarding the possibilities of
effective central planning.

It is claimed that the Russians have pro­

gressed as much in 12 years in the matter of industrialization as other
nations have done in two generations*^

While progress in education,

recreation nnd health services in many ways has outstripped the rate
2U
in capitalist countries.
Although the success of the Russian Experi­
ment may be accepted (though even Harris believes that the price paid
in the form of human energy and loss of human freedom has been high,
yet it must not be forgotten that many attempts at economic controls
^Mitchell, op* clt*, p. 118
Sidney Hook, op, clt», p* 671
2 ^S* E. Harris, "Can Capitalism Be Salvaged!", Survey Craphic, October
PP. 525-527

Ibid*
2*
"ibid*

)

&nd planning have not been successful*

The Hew Deal in the United

States is a case in point.
In such cases, however, it has been su^eeted that these
programs were ill-planned, ill-timed, and inefficiently executed*
Experience should make us wiser, while greater development in the
science of statistics should enable us to predict human behavior with
greater accuracy,

furthermore, if the planners or policy makers start

with"institutional man" rather than "economic man", many of the
failures could be avoided, because the actual behavior of man is not
exclusively controlled by economic considerations.^

finally, it is

contended that we need not be discouraged by some of the past failures*
H. G-. Wells, with his uncanny insight into the future of the things,
argues that
so far nothing has been attempted, so far no first class mind
has ever focused itself on these issues, but suppose the laws
of social and political developments, for example, were given
as much attention, criticism and discussion as we have given
the laws of chemical combination during the last 50 years.
What might not we e x p e c t
Therefore, it is argued that the course of wisdom is not to
oppose planning, but to make it more intelligent so that it is not
accompanied by inefficiencies which have been responsible for the
failure of some of these plans in the past.

Off

That intelligent planning is possible, stands to reason.
brings us to the second question;

This

Is over-all national planning desir­

able?

Walker, from Economic Theory to Policy, (Chicago; Chicago
Univeriity Press, 19^3), p. 11UT----------27
Quoted by II. E. Hedges, "foreword". Time for planning, by Lewis L.
Lorwln, op. clt., p. vii
2SLorwin, op. cit., p. vii

Row this is & highly controversial issue since it involves
Judgments of value on which neither the philosophers nor the people
have ever agreed*

However* it is possible to examine some of the

implications of such an over-all planning, though the final Judgment,
of necessity, must be governed by the particular circumstances of the
case.

What may be one people's meat may be another people's poison,

or vice versa.
First of all it can be said that no single program or policy
is good for all people, and even for the same people for all times.
This is because every policy is causally related to a set of circum­
stances, and since history never quite repeats itself, what might be
good under certain conditions might not, and most probably will not,
be good in different circumstances*

So it seems that the desirability

of a plan or policy must be relative to the situation.
Secondly, what is or what is not desirable may be viewed from
the standpoint of either the economic or the social and moral conse­
quences of planning*

This distinction between the different aspects

of human behavior, however, is unrealistic.
The distinction between what we call economic life and social,
political or cultural life is a division between abstractions,
but not between real things;one and the same phenomenon may
be regarded as economic from one point of view and cultural
or political from another point of view. Economic planning
by altering the structure and working of the economic system,
must affect also the non—economic sphere, because economic
activities are either the outcome or the source of other activi­
ties, and in many respects determine them*^9
It is impossible to Judge the efficiency of the economic system
unless we know what Job that system is supposed to be doing.

.And that

Job cannot be defined without cultural and ethical considerations, be­
cause economic activity does not seem to be the final goal of human
F. Zweig, planning of Free Societies. (London;

19* 2),

p.

231--- “

----

--------------

Seeker & Warburg,

76

life*

On the contrary* it appears that the ultimate place of economic

organization in human life ie to assure a secure basis for an ordered
expression of individual capacity and for the satisfaction of the needs
of man in non-economic directions*^0
Besides, economic activity not only supplies man with the where*
withal of life* hut also becomes a part of his life*

The way in which

a man earns his living influences the formation of his character «md
his capacity to enjoy life out of his work*

So if an activity or &

system is economically highly productive, but spells the loss or negation of values such as freedom and happiness which we cherish* and to
preserve which we fight wars* it cannot be acceptable*

Therefore, the

question to be asked is whether the Eussian type of over-all planning
is commensurate with non-economic values which we prize so highly?
The question will have to be answered purely deductively.

We

cannot accept what is going on in Russia as a test of over-all planning*
for what is happening there is the result not only of central planning*
but of countless other forces* which of course might operate as well in
other countries* but may not and need not be the same*

Biere can be

little doubt that if Russia were not so much taken up by political and
other non-economic considerations* her plans and methods would be differ­
ent*

It is conceivable that if it were not for the active opposition of

foreign nations and their attespte to undermine the Soviet system, the
course of things in Russia might not be the same.

So it does not seem

to be fair to Judge over-all planning on the basis of conditions that
prevail in Russia* Just as one cannot attribute all the material success
of the Uhlted States and Great Britain to the system of private enter­
prise exclusively.
->^John Dewey, Liberalism and Social Action, (STew fork*
Sons, 1935). pT 5 8--------------------

G* P* Putnam*s

77

"That o t m a period of a hundred years preceding the Wbrld
War II national income in this country (U*S*A*) doubled every
fifteen or twenty years is at least a partial vindication of
the system (free enterprise)...(hut) one should not too readily
assume that credit for America's dizzy rise goes to the system.
A happy conjuncture of natural resources, vast free trade
areas, native intelligence, fortunate relation of population
and resources* and until recently, isolation from covetous
neighbors— all these should share the credit*”3^
Qras, experience in Russia can neither be cited as a proof of
the success nor of the failure of over-all planning, while no other
country has given it a sufficiently long trial.

Some countries like

the United States and Great Britain approached something like national
planning during the war days.

But experience during war conditions

cannot serve as a guide for conditions of peace.

Though Beveridge^

and others argue that what can be achieved in war can be achieved in
peace as well, this seems to be an unrealistic assumption.

During a

war when the life of a people iB in Jeopardy, great sacrifices and her­
culean efforts can be expected and are made.

But it seems ispossible

to expect people to continue to live on the level of super—normal ac­
tivity of which they are capable during periods of national crises.
So with regard to the possibilities of over—all planning during
times of peace, we shall have to rely on a priori reasoning alone.
If the aim of over-all planning were to improve the general
level of living, and if it could be shown that the above purpose can
be achieved better through over—all planning, it would have much to
commend itself since a high standard of life is a necessary condition
for abundant living*

Harris, op. cit.. p* 525
^William H. Beveridge, Full Smployment in a Tree Society. (Hew York*
W* W. Horton & Con%>any,

If wo remember that in free economy *%ach Individual or concern
generally makes the plan without regard to, in Ignorance of, f»"d with­
out concern for the plans of all other businesses in the same or other
sections of the economy",33

while in over-all planning a central

authority could carefully plan production by taking into consideration
the demand and resources and thus prevent disequilibrium which results
in waste and misery, a prima facie case can be established for over­
all planning.
Actually, however, it seems that planning on such a large scale
is likely to become cumbersome and inefficient and suffer from the in­
herent weaknesses of big business.

In such a huge enterprise "final

authority cannot be delegated for that results in lack of unity of policy
or regulation of performance.
the

While if all authority rests in center,

system Involves bureaucracy in its worst forms

'red tape’, hope­

less delay, decisions based on diluted memoranda"*3^
Besides, as Papi argues, such state interference with economic
life is inherently defective since the state cannot take into considered*
tion factors of marginal value, discount of future wants, insurance
against risk and adherence to market conditions governed by consumer's

mechanism for the equalization of failures, deficiencies, and
omissions. In an unplanned economy the failures and omissions
of seme people in one direction might be compensated by other
people in other directions. In planned economy
sood
and bad qualities are multiplied and exagger a ted.3°

aciaillan Co., 19^6),

Moreover, the claim that planned economy is capable of better
utilization of resource* is open to question.

Zweig, for instance,

feele that while planned econony may be superior to an unplanned econ­
omy in the domain of organization, it is not so in actual working of
the system#^

He argues that while Russia increased her national income

35 P®r cent during the period 192 S-3 7 *

the corresponding period

Japan increased her national income by 21 per cent, Sweden by 27 per
cent, and Norway by J>0 per cent.3®

>/hile this comparison may not be

entirely fair, it shows that planned economy is not inherently more
efficient in terms of economic productivity*
But even if it were so, we have to consider the non-economic
costs which a system of over-all planning might entail.

For example,

if in the process of planning, or as the result of planning, the condi­
tions necessary for optimum growth end development of human personality
disappear or receive a violent setback, such a plan could not be ac­
ceptable even if it should offer greater returns in the form of material
goods or per capita income.
Now, although other freedoms are also necessary for full and
abundant living,39 yet the most important freedom from this standpoint
seems to be the freedom to choose one's work or occiqpation in line with
one's forte or interest.

If that is denied to a man, not only is his

life soured during the hours of work, but elso his outlook on life is
warped and the growth of his personality hampered.

It might be argued

that after a time no matter what the work of a person might be, it be—
Tf-------------------------Ibid*
3<s £ i 39
Beveridge, op. cit*, pp* 21-22

80

comes a mett"ter of habit and therefore the danger of uncongenial work
is unnecessarily exaggerated.

It may also he contended that with

further development of technology, when most of the work will he done
automatically hy machine end the operator will merely siqoervise it,
not much distinction will remain between one work and another.

Tet

it seems that man will continue to prefer one task to another, and
one place to another.

So long as he does so, freedom of choice of

occupation is a necessary condition for proper and healthy develop*
ment of human personality.
Another objection is that over-all planning assumes one goal

to he achieved in a certain way.

But

the welfare and happiness of millions cannot he measured on a
single scale of less and mere. Ihe welfare of a people, like
the happiness of a man, depends on a great many things that
can he provided in an infinite variety of combinations. It
cannot he adequately expressed as a single end, hut only as
a hierarchy of ends on a comprehensive scale of values in
which every need of a person is given its place. 3b direct
all our activities to a single plan presupposes that every
one of our needs is given its rank in order of values, which
must he complete enough to make it possible to decide among
all the different courses which the planner has to choose.
It presupposes in short the existence of a complete ethical
code in which all the different values are all allotted their
place.^0
Actually, human beings are never satisfied with such a life.
"The richness and wisdom of life lie in pluralistic and not in monistic
solutions and the greatest danger which faces planned economy is the
tendency towards monistic solutions.

Some element of friction and

conflict seems necessary from the point of view of fuller development
hp
of one's self or personal ity."
ek, Boad to Serfdom, (Chicago:
p. 57

4l

Zweig, op. clt., p. 263
2Ibid.

University of Chicago Press, 19*44),

X

-** 1,

^>

82

against life to which mo81 of us are condemned in modern society*
What then is the solution!

Free enterprise does not offer us

security that we need so badly* while over—all planning does not assure
us freedom that we prize so much*
planning and freedom*

luckily the choice is not between

We can have both if we follow Aristotle's

principle of the golden mean which contains the essence of human wis­
dom*

In the affairs of men* particularly when cofeplete truth is un­

known and unJoxowable* compromise seems to be the best solution*

In

the economic sphere it would mean that a mixed economy is a more desir­
able goal than either unrestricted "free enterprise" or completely
"planned economy"*

Mixed economy would mean that certain enterprises*

by virtue of their national lsportance or for some special reason* may
be managed better by the state or local government, while others should
be left to private enterprise.

Further, that while completely control­

led economy would not be acceptable in view of its non-economic implicartions, some form of intelligent guidance or direction may be necessary
to coordinate and integrate production with demand to avoid wastes and
business crises*
But the agency to bring this about should act mainly in an
advisory capacity* except in the case of great emergencies; and it should
be free from governmental domlnation*
Doe extent to which state interference or control might go* would
have to be decided by the enlightened good sense of a people*

No hard

and fast rules can be formulated delimiting the spheres either of the
state or private enterprise*

However* one guiding principle may be laid

down*
It needs to be recognized that state and society exist
Social Control of Business* (New York*

to create

Whittlesey House

S3

conditions for better fulfillment of the purposes of the individuals*
For while it can be said that state or society exists for man* it can­
not be said that man exist b for state or society*
and center of activity.

^an alone is real

Apart from his purposes society and state

have no importance or justification*
So the function of the state should be to assure conditions
under which men are better able to seek their salvation than they other­
wise would be if they were constantly interrupted by the ill designs
of their neighbors.

If some individuals, or even a large majority of

them, need help and assistance against a powerful interest or a combina­
tion of them, it will have to be provided*

But should the state decide

to control the life of the majority of the people because they are
stupid and cannot look after themselves, something is wrong with the
state or the people*
It is the duty of the government to create conditions so that
people can look after theaselvtes, just as it is the duty of the parent
to see that the child learns to look after himself.
parent can do things better.

Of course the

But a wise parent will help the child to

l e & m to stand on its own legs.

A wise government would do likewise

by creating conditions so that people c m look after themselves.

Other­

wise man, who is an end in himself, becomes the means of the designs
of11a few” who, as history shows, are capable of as much bungling as
the ordinary mortal*
To sum up, it seems that some checks and controls over "free
enterprise" are necessary.

But these controls, with a few exceptions,

might be of a regulatory nature.

They ought to aim at creating condi­

tions under which individuals, with proper respect for the freedom of

others* can seek their salvation according to the dictates of their
consciences.

Shat these controls have not proved very effective in the

past is no condemnation of this approach.

Past failures were due

largely to short-sightedness of the policies, lack of proper coordina­
tion and had execution.

It seems possible to avoid these mistakes.

Thic would, of necessity, imply some central planning.

But this plan­

ning ought to h e in terms of long-range policies designed to remove the
frictions and snags
whole system.

in the economic system rather than control the

Moreover, as will he described later in the chapter on

Industrial Policy, the formulation of these policies might better be
entrusted to a non-government el independent agency.

CHJPTER VI

CRITERIA OF GOOD POLICY
A policy is a plan of action to achieve a desired end.

Coxw>

sciously directed life, whether of the individual or the group, in­
volves making plans for objectives which it ie thought fit or neces­
sary to achieve.

These plans, when consistently or deliberately pur­

sued, give rise to policies.

Though the policies can be individual

or group policies, yet in economic discussion, policy usually is taken
to mean a public or state plan cf action to achieve a certain goal
commensurate vith general welfare.
Of course economic life can be carried on without any conscious
policies.

3ut ejqperience has shovm thr t such a situation leads to

waste, confusion and difficulties'" and does not reflect creditably on
human beings who are given the power to foresee and plan rationally.
The fact that some of the policies have not achieved their objectives,
or have led to different results than the one desired, does not prove
that policy-making ie a useless under taking.

It only indicates that

policy-makers bungled somewhere in the process, and either started
from the wrong premises, or committed a fallacy in their reasoning.
Cr, they lacked imagination to see that when they would launch the
j------------------------------dansen, Sconomic folicy and Full Employment, op. clt., p. 17f

86

policy circumstances night be different, or that the introduction of
the policy itself would create new situations, where further adjust­
ment would be necessary,^
Whether the policy-makers would ever surmount these difficul­
ties is a question which cannot be answered with any degree of cer­
tainty,

But the fact that human beings have the capacity to learn

from experience should inspire some confidence.^

Moreover, the alter­

native to policy-making is serious maladjustments, a si tun tion* which
would never be accepted by a majority of human beings*
It is, however, important to avoid pitfalls, end when i&clring
policies it would be necessary to observe certain principles to faci­
litate the success of those policies.

These principles are deducible

from stem causality which operates in the world, and which is no
respecter of persons, or their ideals and ambitions.

The most well-

intended and pious policy is bound to fall if it should miss some link
in the chain of causality•
Of course, with our limited knowledge of causation, particularly
in the social sphere, not even the wisest policy-maker may be success­
ful in formulating a perfectly foolproof policy,

nevertheless, it

certainly would be less vulnerable and attended with fewer unwanted
features than the one based on scanty respect for hard facts, or the
logic of events.
In order that a policy may have greater chances of success,
it needs to take into consideration the following principles of logi­
cal relationships and causality,
•5
Walker, op. clt., p. lU2
^Joad, Testament of Joad, (London:

Taber £- Faber, 1937)»

87
(a)

Before laying out a policy, it would be necessary to

agree on the structural* design and the fundamental bases on which
society rests*

k

A policy which deals with any of the basic issues

of human life is likely to bring about some modification in the pat—
tern of social life.

Under the urgency to achieve results this

point is apt to be overlooked.

But sooner or later it is bound to

make Itself felt and cause consternation or disappointment to those
who, if they had clearly envisaged the working of the policy, might
have thought twice before accepting it.

Bor Instance, disgusted with

the evils of unregulated capitalist economy, the policy of nationali­
zation or socialization of Industry might be proposed or even accepted*
The people might forget that such a policy, in order to be effective
or successful, might necessitate a design of living which they could
not or would not accept if it were offered to them in clear-cut terms*
*‘*any people might not support collectivism in economic matters, if they
realised that the governments which practise collectivism in economic
matters do not remain democratic in political matters*
(b)

The policy should not only be consistent with and ensure

the design of social life which we cherish, but it should also be
clearly related to definite objectives... The motivation for any eco­
nomic or social policy is the desire for Change from a present unsatis­
factory position to a situation that is supposed to constitute an im­
provement.

So we must be clear as to where we want to go.

In other

E--------------------------Earl Brandt, "Basic Elements of an International Pood Policy", rood
for the Ubrld, (Ed.) T* W. Schultz, (Chicago; University of Chicago
Press, 19^5), p. 321
A. Heilperin, Economic Policy and Democracy, Public Policy Pamphlet
37 (Chicago: university or Chicago Press, 19^3)* P » 3
Zweig, op* cit., p. 231

88

words, a good policy mast be based on veil thought out objectives*
Very

often, policies are fonaulated to eliminate certain situations

which have emerged.

These go engross the minds of men that changes

are advocated without a frail realization of what is to be substi­
tuted for the old, and what would be the immediate and remote conse­
quences of the new order.

Under such circumstances, the new policy

must, of necessity, be incomplete and ill-conceived, and bound to
give trouble when efforts are made to implement it.
(c)

While the policy-maker may have a clear conception of

the objectives to be realized, his policy may go in default, If these
objectives are not coordinated and related to the generel scheme of
human life.

Kany times the policies, so far as the immediate objec­

tive ie concerned, may be most appropriate; but when brought into
relation with the rest of the life, they may confront values and ideals
to which society might attach greater value.^

Whatever the experts in

different social sciences might third:, human life is a coaplex of
diverse relationships.

A policy which, for exaxple, aimed exclusively

at economic efficiency may fail to achieve the purpose because human
beings arc not entirely economic animals*0 Economic prosperity may be
a very strong inducement or attraction, but it usually loses ground
o
when pitted against religious and* social values.-' This would be pan■g—

■'

■ ■

11

■

..........

—

D. Gale Johnson. Forward Prices for .Agriculture, (Chicago;
of Chicago Press, 19H7V. p. 13-- 2
--------

University

Brandt, op. cit., p. 322
8Ibid., p. 3 27

9
A.B.B. Fisher, The Clash of Progress and Security. (London, 1935)* P« 3

tlcularly true of those countries like India where the materialistic
civilisation has lot as yet tsken hold on the masses*

So every eco­

nomic policy must be related in its objectives to the political, social,
religious and moral objectives which operate in the life of the people.
(d)

Another important principle is that the policy-maker

must have a clear conception of the short-range and long-range impli­
cations of the policy he is endeavoring to formulate.

While the policy­

makers, of necessity, would be required to deal with a present situa­
tion which in many cases would require a short-range policy, they can­
not afford to forget that short-range policy is usually a makeshift
arrangement and therefore finally it is the long-run policy that should
prevail.

And so no element in short-range policy should be accepted

which might create stupendous difficulties in following the long-range
program at a later stage.

Ib take a concrete example, while redistri­

bution of landlord estates in small units of family size may be a good
short-range policy to ameliorate the condition of the tenants, such a
step might become an insuperable difficulty if later it might be thought
desirable to have large scale mechanized agriculture as a long-range
policy.
In other words, the short-term policy should be carefully re­
lated to the long-term policy so that the working of the latter may
not be made difficult or impossible by short-range measures.
(e)

She policy-maker will have to remember that he cannot

begin with a clean slate.

We have to deal with our economic system

as it is, and as it may be modified, and not as it might be if we have
a clean sheet of paper to write upon.^

Moreover, it must be remembered

^ President Wilson quoted by H. Gordon Hayes in spending. Saving and
Employment, (Hew York* Alfred A. Knopf, 19^), p. 195

90

that the economic system of & country is part of the mores of the people,
and any change which goes counter to the mores of the people will have
very slender chances of success*

For this very reason, the introduc­

tion of policies and programs which have heen successful elsewhere must
he examined with the greatest care before they are introduced into a
country with a different culture and civilization.
a country are an expression of the ethos

The institutions of

of a people and cannot he

changed successfully without altering the social milieu.

This choice

should he made only after thorough consideration.^
For the same reason, it is necessary to approach revolutionary
reforms with the greatest circumspection.
achieved their objectives.

Revolutions have rarely

The question whether it is worthwhile re­

setting a contain order and causing much misery to a large number of
people for the sake of gains which mcy not he achieved, must he care­
fully studied before such a change is recommended*
(f)

In a free society all policies should he democratic,

accepted and Initiated by the will of the people whom they will affect*
The experience of history has proved time and again that the best way
of living consistent with the ideals of human dignity and personal free­
dom, is the democratic way*

lfo one man or a committee Of men have

either the intelligence or the ability to outline or prescribe what is
good for a people.
Social life or political institutions have a justification only
"^However, it is recognized that institutions may lag behind as values
change* In such cases it becomes a question of how best to modify the
institutions to the new situation.

91
in scfar as they contribute to the happiness f»r>d abundant living of the
individuals*

Society or state epert froia the individual has no entity

and no existence*

12

She final end of all social activity is the human

being and not a aythicel society or state.^

If the organization of

society is such that human beings become tools of others*-whether a
saall oligarchs' or a tyrannical majority— the moral justification for
that social order disappears.

Ho committee of self-styled omniscient

social architects should take shelter behind the proverbial stupidity
and conservatism of the man in the street and force on him an organiza­
tion or reform which he does not like cr does not underetand.
in the street is not so stupid as is supposed.

The man

He may be lacking in

expert knov/ledge and information* but he is usually well stqpplied with
common sense concerning what is good for him.

In any case* no one

should have the right to inflict a policy on the people unless the
people voluntarily accept it.

The social reformer often is too im­

patient to bring about immediate results.
bears ample evidence* seldom succeeds,

Such a policy* as history

.And even if it could be imple-

mented through dictatorial methods, it generally does not contribute
to general welfare.

On the contrary, it causes much agony and misery,

as in the case of ‘
Hussian reforms.

Thus, a good policy should be limit—

]
ed to objectives and principles on which there is considerable agreement.
(g)

It is desirable that a policy should result from joint

deliberations of technical experts, disinterested laymen, representa­
tives of affected interests* and social scientists.

15Volfe,
;
----------------op. clt.* p. 599
^Johnson, op. cit.* p. 13
Joseph Ackerman end Marshall Harris (Sd.), Jamily Farm Policy,
(Chicago: University of Chicago Press, 1S^7)» P* «

93

In such a case* the advantages of the policy should he weighed carefully
against the disadvantages, and the decision should he made with a clear
consciousness of the net results*

Ihe people should know what sacri­

fices they are making, and for what purpose,
(i)

A sound long-run policy should not he in the nature of a

palliative, hut should go to the root of the matter,^

While in acute

cases it sometimes might he necessary to allay the symptoms to give i*^
mediate relief, dealing v.dth the symptoms alone cannot he expected to
bring about the cure.
the evil,^

So a good policy must go to the root cause of

While it often nay not he possible or desirable to under­

take an immediate major operation, nevertheless, it is possible to
introduce gradually changes which will ultimately eradicate the basic
causes responsible for the problem,
For example, the credit policy in India has failed because it
tried to deal only with the symptoms and did not aim at removing the
basic condition that was responsible for the indebtedness of the peas­
ant,

Under such conditions, even if the peasant could be freed com­

pletely from debt, he would not be helped permanently.

In a short

time he ag^in falls into debt, thus indicating that the credit program
has been merely a palliative.

Finally, every economic policy should start from the assump­
tion that the "chief test of an economic system is not Aether it makes
1 5 -----------------------------------

C. S, Qrwin, She Future of Farming, (Oxford:
p. Ih6

Clarendon pres b , 193°)*

^Alexander Loveday, "What the Policy Ilaker Needs", Economic Research
and the Development of Economic Science and Public Policy. (New York*
National Bureau of Economic Research, 19^6)* P« 2h

9U

men prosperous or whether it secures distributive Justice (though these
are both very desirable), but whether it leaves men1s instinctive
growth unimpeded*

Tb achieve this purpose, there are two main conditions

which it should fulfill*

it should not cramp sen's private affections,

and it should give the greatest outlet to the ispulse of creation*
Since these conditions depend upon the freedom allowed to the individual,
the ultimate measuring rod for the value of any public policy must be
the degree of freedom of action for private initiative and free enter­
prise it manages to combine with other aims*^
1^
'
Bertrand Russell, Principles of Social Reconstruction, (London)
19

Brandt, op* cit*, p* J26

CHAPTER 711
3DUCATI0U POLICY

A program or policy, particularly in a democratic society, has
little chance of success without the active export and cooperation of
the people*

People can lend willing cooperation only if they under*

stand the value and inportance of proposed programs, either to them­
selves or to the nation as a whole.

Though the Socratic dictum that

knowledge is virtue is not always confirmed by experience, and, in fact,
if one may Judge the efficacy of education from the records of world
diplomacy or pressure groups, one may be tempted to doubt the value of
education, yet it is true that in a free society the people must think,
if they are to make intelligent decisions and give intelligent coopera­
tion.^
Education is the basic condition of all progress.

Coag>etent

authorities are unanimous that the chief reason of the backwardness of
agriculture in India is the appalling extent of illiteracy.^

Want of

education keeps the people ignorant of the scientific practices and
modem methods which have been developed in India or In other countries
1

Report of China - United States Agricultural Inhesion, U. S.D.A. (Office
of Foreign Agricultural Relations), Washington, 19*+7# P* &L
2
Policies for Education in American Democracy, (Washingtons Educational
Policies Commission, 19*+&)» p* 13
Visvesvaraya, Planned Economy for India, (Bangalore:
Press, 1931+)t P. 3*
95

The Bangalore

96

for increasing production and income*

The failure to use land so as

to conserve resources, to diversify crops, to seek'a better diet,
housing and health, to accumulate and improve domestic animals, these
all rest, in part, on the lack of education.^

Every year hundreds of

thousands of people in India die because of the simple ignorance of
the lavs of hygiene or some such lack of information about the vital
processes of the body*
Hot only is the lack of education responsible for creating

bo me

of the problems which would disappear if the masses understood the real
nature of certain causes and effects, but, also , very little progress
can be made with positive programs or policies as long as the people
remain uneducated.

The failure of rural uplift programs to achieve

success is one example out of many which demonstrates that not much
progress can be made in improving the economic level of the people
unless they take intelligent interest in such programs.

In fact, there

is a significant correlation between literacy and the material well­
being of a people,6

The need for general education is, therefore,

inoperative*
Objectives of Education Policy
But before we outline a program of education, we must have a
clear idea of the objectives to be attained through education.

To say

j j ------------------------------------------------------------------------

M, Visvesvareya, op. cit., p. 3U

5

Joao Oioncalves de Souza, "Land Tenure Problems in Brazil", Family
Farm Policy, Ackerman and Harris (Ed*), op* cit*, p* 283

£

M. Gormsen, The Principal Structural Problems of the Agriculture of
Roumanla, (Bucharest; Car tea Bomaneasca, 1§U*>)', p. «*7

97

that we need education is not enough,

ye may have an extensive system

of education, yet it may fail to achieve our ends*

For either the con­

tent or the methods may he such that while the schooling may impart in­
formation tc the pupil, it fails to develop the qualities of personality
or good citizenship which are necessary for the success of the individual
in his own work as well as in the progress of the nation as a whole.
Unless the end is clear, a program or an organization will he
ineffective and its activities random, as the arrows of a man will fly
in every direction if he does not know what or where his target is*^
ITow what should he the end or objective of educetionT
a highly controversiel issue.

This is

But we must face this question because,

insofar1 as our aim is not clear, our policies are hound to he confused,
inadequate and ineffective*
The controversy regarding the aims of education has taken many
different forms such as culture versus cash, ivory tower versus watch
tower, intellectualism versus intelligence, general versus vocational,
and so on*

B

However, the essential controversy revolvee around the

question whether education should sharpen and train the intellectual
powers of the individual without reference to his needs as a member of
society, or should education aim at the training of the individual to
fulfill a certain role in society for his own benefit as well as for
the benefit of others.

To put it in a more direct language, the

question is whether education Bhould be cultural or practical*

T~

C. E. i-1. Joad, About Education, (London; Faber & Faber, I9 U5 ), p* 23
S
--------------R. Freeman Butts, The College Charts Its Course, (Hew York, HcGrawHill, 1939), Chapter I

9*

The study of the his to iy of tfals controversy shows that the
following factors directly or indirectly, have been responsible for
this difference of opinion with regard to the aim of education*
(a)

The early Greek view that education was meant only for

"free men"; and, since they had. slaves to work for them, education
had no relation to earning one's living and was to be more or less
o
an intellectual embellishment forthe leisure class.-'
(b)

The influence of thechurch which emphasizedthat edu­

cation should prepare one for the ministry.^
(c)

Duality of mind and matter emphasized by Descartes and

his followers.
(d)

"raculty psychology" which taught that different types

of educationwould develop different faculties
(e)

of mind*

The recent reaction against the traditional studies as

the result of changed mode of life where mechanical and scientific
education is found more useful * ^
(f)

The development of the idea of universal education and

faith in the democratic way of living*

Tot this controversy should have ended when it was shown that
a human being is an organic unity and reacts as a whole.

We cannot

divorce the body from the mind, nor can v/e make a distinction between
general and vocational, or between cultural and practical education*
This division might have had some justification when society was

9Ibid., p. 20
1QIbid., p. 26 ff
11 Ibid., p. 1*3 ff

99

divided into *free men" and * slaves*, or the *elite* and the *prole—
lariat**

But today when we have hitched our wagon to the stars of

equality and democracy, there is no justification for this distinc­
tion, and the controversy is meaningless*
Since recent psychology has shown that human personality is an
integrated whole and reacts as such,
whole man.

12

education should train the

For, if education dealt only with a certain restricted

aspect of human personality, it would lead to an unbalanced development
of the individual.

Furthermore, since the individual is unthinkable

aside from the society in which he lives, education would be faulty
if it treated man as though he lived in a vacuum.
deal with the whole m m as a member of society.

Thus education should
However, we must not

forget that education and society both are not ends in themselves but
are only means to human satisfactions.

Therefore, the efficacy of

both education and society should be judged by how far they assure the
individual and basic conditions for abundant living*
Consequently, we agree with C. 2. 1*1. Joad that the objectives
of education should be*
(a)

To equip a person to earn his living;

(b)

To

(c)

To enable him to develop all the latent powers and facul­

make him act the part of a citizen well; and

ties of Ills nature so as to enjoy good living,^-3

12

'

R. S. "oodvjorth & Donald G. harquis, Psychology. (5th ed*, lew York*
Henry Holt, I9U7 ), p. 87 ff

^Jcad, hbout Hducatlon, op, cit., p. 23

100
Present Situation in India
If, in the light of the above-mentioned objectives, we examine
the educational system of India, we find It wanting on every one of
the three counts*
(a)

The education both at the primary and secondary level Is

completely out of touch with real life.

1^

Though here and there agri­

culture is found as one of the electives on the curriculum of the school,
yet actually very few students enroll in the course and, by and large,
it is so academic that the student does not profit by it.

If the stu­

dent is equipped to do anything after the completion of high school,
it is to proceed to college to pursue a higher course of similarly
academic studies, or to decorate a clerical chair in an officef
(b)

With regard to developing the qualities of citizenship,

education in India is even worse,
introduced only very recently.

The subject of civics has been

Since it is an elective subject in

most universities, and since there are few qualified instructors to
teach it efficiently, very few rural schools, or for that matter, ur­
ban. schools, have any satisfactory provisions for teaching civics to
even the small per cent of students who elect it.

The great majority

of students have nothing to do with anything which does not directly
assist them in passing examinations.

The efficiency of a school is

judged by the percentage of students who paes the final examination
held by a central authority.

It is no wonder that the teacher*s whole

attention is devoted to getting the maximum "passes", on which depends
his promotion.

Generally, what the student learns in a typical rural

----------------------------------

Calvert, V/ealth and Welfare in the Panjab., op. cit.. p, 6l

101

school is answers to questions that the teacher anticipates might he
asked in the final examination.
(c)

As to training the student to develop his latent powers

and faculties* good care is taken that he is developed into a shy* ser­
vile, blindly obedient individual, lacking in self-confidence and indi—

j

I
vidual thinking.

Self-initiative and independence of spirit are meti­

culously exorcised,

A student standing up in the class to ask a ques­

tion infuriates the teacher; discussion in the classroom is heresy;
and originality of thinking is a defiance of authority.
must accept what is offered,

The student

"Theirs is not to reason why,"

The

teacher not only reigns but rules.

In short, the educational system of India sxiffers from all the
defects of the old Japanese end Italian educational systems.

Like the

Japanese system, there is excessive regimentation, undue bureaucratic
supervision* instruction by rote memory rather than by encouraging
original thinking, producing people who axe sterile* tradition bound,

15

and lacking in vision and initiative, ^
In common with the former Italian system, the program of the
school is imposed upon children by those in authority,
the right to question either the motive or the purpose.

Kb child has
Except in the

high school, every child is prepared in exactly the same way as every

other child.

If he cannot meet the standards of the pre—determined

curriculum, he is given no opportunity to develop what capacities he
does have,
^Lafe Franklin Allen, "Educational Reform in Japan", Yale Review
Summer 19^7* P* 706
^Willis E, Pratt, "School System in Italy", School and Society,
April, 26, 19U7, p. 309

I
!

Immediate Policy
It le unnecessary to eogphaeize the need and Importance of uni­
versal compuleory education*

That it has already been suggested and

introduced in certain parts of the country^ is a healthy sign*

But

it seems that the emphasis on education is not vhat it ought to be*
Of course* India*s immediate and most serious problem is that of in­
creased production of food* and it might appear to be a bit of mockery
to spend money on education while people sire dying of hurger or starvac­
tion.

But it is* also* true that the success of programs for Increased

production of food is greatly dependent on education*

Moreover, our

next most serious of problerne-— the problem of population— can only be
solved through education*

If we can properly educate the people in the

art of better farming and birth restriction, many of the other problems
v/ould become less acute and- could be solved more easily*
So while all efforts should be made to increase food production
to feed the people* a crusade for wider education needs to be started*
in order that not only will better farming method become more universal
but also* some reduction might be made possible in the growth of the
population.

If we are successful in properly educating one generation,

the task would become much easier with the following generations*

Thus

food production and education should be our "priority number one"*
Industrialization and other activities can and must wait*
As a matter of short term policy, we should not worry too much
about the ideal type of education.
17

If competent and properly qualified

"
Such as Madras, Orissa, United Provinces, the Fanjab and Sind*
(Indian Year Book* l$kj)

104

according to the plan described above, their education night prooeed
in the regular manner with all the subjects,

01 necessity, this edu­

cation would not he of the type that would be Ideally desirable, or
that could be possible under a long-range plan, since the teachers
would not be satisfactory and necessary equipment might be lacking.
But something would be better than nothing, and the deficiencies might
be removed at a later stage.
Of course, where funds are available and properly trained teachers
can be had, education would follow a different course.
ible to maintain at least one model school In every

It might be poss­

s a i l ,^ 9

The more

able pupils from the ordinary village schools, who may be expected to
continue their education at a higher level, could be sent to the model
school.
For the education of adults, a different course would have to
be followed.

Zn every region there are certain months during which

agricultural operations are at a standstill.

If this time could be

utilized for educating adults, there may be little resistance, and not
many difficulties to overcome.
be a too difficult task.

To get teachers for this work would not

In India, the high schools usually close for

two to three months each year for a long vacation.

If, for a few years,

these vacations could be split tp to synchronize with the idle seasons
of the peasants, the high school teachers, with some financial compensa­
tion, could be asked to go to the rural areas to undertake adult educa­
tion.

This would consist of teaching to read, and imparting knowledge

of better farming methods.

Since most of the high school teachers would

not know much about farming, this part of the education may not be very
^Eoughly equivalent to a county.

105
satlbfactory.

But If suitable books* cherts and pictorial material

could be made available to the teachers, they could teach at least
some of the rudiments of good agriculture*
The actual success of this program will, of course, depend
on the missionary zeal, intelligence and personality of the teachers*
There does not seem to be any reason why, if such a course is followed
for a few years, it may not achieve worthwhile results*

That adults

can learn more quickly has been well demonstrated in the Banish folk
schools where what usually takes the half—grown youth five years to
learn, is acquired by adults in three to five months*^®
Since the adult program would be on a voluntary basis* the
teachers would have to exercise some persuasion.

In the first few

meetings they would have to win the confidence of the people and in­
spire them with a desire to learn*

The actual task of teaching them

to read may only be started when people show some eagerness which,
of course, would depend upon the way they were handled in the first
instance*

1-lore attention might be given to young adults who are

usually receptive to new ideas* though every one should be welcome to
attend the meetings*

The first few meetings might be made more attract­

ive through 3cme interesting programs*
Long Eange Policy
(a)

It should be the responsibility of the state to make ad

quate provision for the proper education of its children*

An educated

citizenry is a national asset and a child* s education should not be
2 o -----------------------------------

Livingstone, op* cit** p. 2

106

dependent on either the puree of the parent or the local bodies which
night be lacking in resources to offer the needed instruction*

How­

ever, the activity of the central government should be confined only
to supplying adequate finances for school buildings, equipment and
properly trained teachers*

It should have no control over either the

content or the method of education.

As the experience* of Oermany,

Italy and Russia confirm, if the central government has control over
the educational system, it becomes a potent power for evil*

So, con­

trol of democratic education should be lodged completely with no single
authority*21
The fundamental responsibility of the central government is to
establish and maintain from generation to generation the broad condi­
tions under vrhich the education of free men may be carried on*

Having

set the framework within which the work of the schools may be conducted,
the government should guard this framework and guarantee to the teach­
ing profession and the educational authorities freedom and opportunity
for the intelligent and loyal discharge of their duties, intervening
directly only in case of evident breach of trust*

This, rather than

the detailed development, administration, and supervision of the pro­
gram of education, is the responsibility of a democratic central govera. 22
ment.

The central government should provide finances on the bases of
clear cut principles which can be applied automatically*

In other words,

the financing of schools should be free from any discriminatory Judgment
on the part of the government or the pressure groups*
Policy for Education in American Democracy, op* clt., p* 1^5
22
Ibid., p, lh-5

107

The actual control and supervision of the content and nethod
should lie with Independent Provincial Educational Boards, constituted
of elected representatives of the people and the teachers, with a few
independent thinkers.

These hoards would lay down general standards

and consider questions of policy.

Wide scope for local initiative and'

experimentation would he left to the District Education Boards, which
should consist of an equal number of representatives of teachers and
citizens.

This local control would he necessary to adjust the system

of education to meet the locsl needs of the people.
To insure a democratic way of life, it is inoperative that
bureaucratic and centralized control in education should go.

Vc can­

not maintain democracy if our educational system is based on autocracy
and blind obedience to the orders of remote superiors.

Democracy is

worth preserving, for without it the freedom of the people disappears.
After having fought a long and bitter battle to win political freedom,
we should be very Jealous about it.

Freedom is very elusive and unless

carefully guarded and fostered, it is likely to disappear.
under democracy that we can uphold freedom.

It is only

For it is democracy that

"makes for greater tranquility, justice, freedom, security, creative
diversity, reasonableness and less cruelty, insensitiveness and intel­
lectual tolerance than any other social system that has been devised and
proposed so far.^3
Of course, the decentralization of education might prove less
efficient in certain ways than central control*

But smaller values will

have to be sacrificed for the sake of greater values.
(b)

Another badly needed reform is the realization of the wo

and dignity of each human being and the necessity of erecting conditions
23

p. ^ daey Hook» Education for Modern Man, (Hew York;

The Dial Press, I9 U6 ),

108

for the unfolding of human personality.

Such development should be free

from the crantoeniag Influences which in the past have anrohasized blind
obedience to custom, tradition and the arbitrary authority of the
teacher.

Our system is notoriously guilty of killing initiative,

confidence and originality in the students.

self-

This will have to go.

The pupil, no matter of what age, must be respected as an individual.
Tills freedom of development might be achieved in two ways:
(i) By making such provisions in the school program so
as to enrble students to share mailing of decisions, particularly those
affecting themselves.

The system of students always receiving orders

from "somewhere" needs to be scrapped.

Of course, it would meet with

resistance on the part of teachers used to the autocratic methods.

How­

ever, if the attitude of our Indian Civil Service men can undergo a
change with the change of the government, we need not be pessimistic
that the teacher will not be amenable to the new order.

The relation­

ship between teacher and pupils must not rest on authority and fear,
but on mutual respect and cooperation.

It is impossible to maintain

democracy in the political sphere if the educational system, which is
to form life-long habits of the student, is run on undemocratic princi­
pies and practices.
(ii)

ple

Through the press and the educational agenc

teachers will have to be educated Into shedding the illusion about
their own omniscience and sharing with John Dewey the realization
that full truth is never known and th?t we must forever be led by the
facts to revise our approximations to it.

The teachers must be made

to understand that healthy skepticism on the part of the pupil is

25

B. Wootton. Freedom Under Planning, (Chapel Hill:
Forth Carolina Press, 19^5)• P» 157

Universit** of

109

necessary for the search after truth.

They should encourage questions,

doubts and discussions on the part of the students, rather than curb all
difference of opinion.
( <e ) Thirdly, we must get rid of the present system of
examinations.

It not only is of no use educationally* but actually

distorts the process of education, so that the energies both of the
teacher and the pupil are directed exclusively toward getting a "pass"*
The uniformity it tries to bring about is psychologically and educa­
tionally unhealthy.

We do not want uniformity in individuals, but

diversity, for it is through diversity that the human personality un­
folds Itself and becomes the condition of individual happiness and
progress to the community. ^

The real test of education is not the

amount of knowledge acquired, but whether the students get mentally
pC
and emotionally developed. u In fact, education is what a person is
left with when he has forgotten all he knew. 271
The criticism that teachers might show undue favoritism if
central examinations are abolished cannot stand the test of experience.
In those classes where there are no central examinations, the results
have been satisfactory.

Moreover, experience in the United States and

other countries indicates that where trust and responsibility are re­
posed in the teacher, he does not fail.
Preed from the tyranny of the central examination, the teacher
can adjust the program of studies according to his particular forte,
25

National Association of School Masters, Post-War Reconstruction in
Education, p • 7

Livingstone, op. clt., p. 5
2^Lord Josiah Stanp, "Essential Characteristics of Democracy", Education
for Democracy. (New York* Columbia University), p. 5*+
~

110

and the aptitudes and needs of his pupils*

This is more important

than having every teacher teach the same things* in the same way and
at the same time* without any freedom to make personal adjustments*
( A)

The emphasis on the education of girls and women

needs to he augmented considerably*

’..hatever the position of women

in the social framework of Indian society is in theory* actually
women determine the mode of living to a very significant degree*
Keeping up the home and rearing the next generation place them in a
position where they can do much good or much harm*

Lord Linlithgow

had a thorough realization of the problem when he said*
"My firm conviction, after two year*s work in India (and my
view was shared by all ny colleagues* British and Indian)*
is that no more potent instrument lies to hand for promoting
rural development than a bold* determined, and persistent
drive towards the goal of a sound primary education for the
girlhood of the countryside**^®
Many changes and reforms in India* as Darling found in his
own experience in the Panjab* have either not taken root or have
failed to achieve any worthwhile results because men have found it
difficult to convert or persuade the womenfolk.^
In fact* educating women and girls is likely to bring returns
and in a shorter period of time than educating men and boys*

Because*

whereas boys will themselves profit from their education* the education
of girls also profits all the children she will have*

So if for any

reason, such as shortage of funds or teachers, a provision cannot be
made for the proper education of all the children of the nation* it
5g
Lord Linlithgow, op* clt*, p* 21
29
B.
L* Darling, Wisdom and Waste in the Panjab Village, Austicus
Loquitur. (London; Oxford University Press), 1935

would “be worthwhile to concentrate a greater effort on, the education
of the girls*
23ae education of girls can, also, he greatly expedited and
facilitated through the introduction of co— education, which is coming
sooner or lrter anyway, as the experience in other countries and India
itself proves so well*

It is also desirable from psychological and

educational points of view.

Our approach to sex is highly unsclentl-

i
fic and detrimental to the health of the individuals.

Human personal-*

ity is an organic whole and by suppressing or repressing any function
of the organism, whether it be emotional or sexual, we cannot hope to
achieve a well-balanced growth of human personality.

Segregation of

the two sexes is based on primitive psychology and irrational preju­
dices.

Unless boys and girls can come together to build normal and

healthy relations and are able to sublimate the needs of their libido
through work and play, they would only succeed in building abnormal
attitudes.
However, prejudices die hard and slowly, and, therefore, in
the early stages it might be necessary to have separate schooling of
boys and girls.

So far, this has been a considerable obstacle, since

in many cases neither the local government nor the community could
%

afford to have a double school system.

But it seems that this diffi­

culty could be overcome by some sort of double shift system.
work in India could begin at St00 a.m.

School

in the winter and 6*00 a.m.

in the summer end continue until 3*00 or 9*00 in the evening for a few
years, as has been done in many American schools to meet the post-war
demandafor education.

If, in the United States, temporary cheep huts

can house the increased students, there is no reason why in India we

112

should Insist on elaborate and costly edifices*

The conditions for

school8 end colleges in the matter of "buildings* equipment* and even
the qualification of teachers mast be relaxed considerably to meet the
emergency of mass education*
(e)

In addition to the system of general education* there is

need for specialized education through agricultural extension services*
Of course* many problems might disappear or become easier to handle
with the spread of general education* yet Judging from the experience
of other countries* it is certain that we will have to provide for
specialized education of the peasantry.

An extensive program of educa-

tion in better farming methods will ever remain a necessity of progres­
sive agriculture.

In other words* an extension service* after the

model of the United States* is required to acquaint the peasants with
the latest research and development in farming* marketing* conservation
and allied practices.

Che spreading of such information will affect

the prosperity of the peasants* as also* the national dividend through
greater efficiency of production.
Extension services* however* must include not only agricultural
work in the form of distribution of improved seeds* improved animals*
fertilizers* insecticides and other materials needed to improve farm
practices* but also* other aspects of life such as health, nutrition*
housing* recreation, education, child care* home management* et cetera*
This is because life of the farmers is characterized by a high degree
of integration in which family, religion* recreation, tradition and
community structure and organization ere closely tied up with agri­
cultural activity*^
^U.S.D.A.. Heport of the United States-Syria Agrlcultursl Mission.
(Washington: orrice or Foreign Agricultural delations*
pp. 3 O- 3 1

113

Homemaking should receive as much attention as farming* since
the level of living cannot he raised satisfactorily without adequate
training and education in homemalclng.'^’ She home is the hasic insti­
tution in any society.
and ideals in the home.

The children establish their attitudes, habits
It is the home that perpetuates the culture

70

of any people.-^
In addition, something of the type of U—H clubs also are needed
to form an important part of the extension program In India, as it has
been done in America.

The purposes of h-n clubs have been well stated
rr-z
by Professor Sanderson.^
1.
To help rural boye and girls to develop desirable ideals
and standards for farming and homemaking, community life, and
citizenship and a sense of responslbility for their attainments*
2.
To afford rural boys end girls technical instruction in
farming and homemaking, that they may acquire shill and under­
standing In these fields and a clearer vision of agriculture
as a basic industry, and of homemaking as & worthy occupation,
3.
To provide rural boys and girls an opportunity to "learn
by doing" through conducting certain farm or home enterprises
and demonstrating to others vloat they have learned.
U. To instill in the minds of rural boys and girls an intel­
ligent understanding and an appreciation of nature and of the
environment in which they life.
3.
To teach rural boys and girls the value of research, end
to develop In them a scientific attitude toward the problem
of the farm and home*
6.
To train rural boys and girls in cooperative action to the
end that they may increase their accomplishnents and, through
associated efforts, better assist in solving rural problems.

* P•
U.S.E.A*, Report of the Philippine - tlnlted States Agricultural
Mission, (Washingtons Office of foreign Agricultural Relations, 19^7)i
32

P. 37
33

E.
Sanderson, Rural Sociology and Rural Social Organization, (iTew York*
John Miley & sons, iyU2), p. *KJ3--------------------------

fev

115

A districtextension office would be located in
subdivision within

eachprovince.

each district

The business of this office will be

to provide adequate supervision for the extension work in each sail
(i.e., county) within the district.

There should be at least one agri­

cultural, one home economics, and one youth work supervisor in each
district office.

Zn addition to the usual supervisory services, this

office should act as a liaison between the zail offices and subjectmatter specialists in the provincial office.
The zall extension office would be under the zail extension
agent who would be assisted by agricultural, home economics and youth
program assistants.
created to aid the

Anadvisory Zail-Extension Council should be
zailextension service.

In each zail a rural-youth institute should be established with
the zail extension agent as the principal.

This institute would be

designed to give farm boys and girls practical knowledge of scientific
agriculture and home economics and help them to become successful farmers
and homemakers.

Short courses also could be held for adults.

So far, progress in rural uplift has been negligible because the
program is not comprehensive, personnel is inadequate, and because it
comes to the peasants from "above".

To be successful, the program should

evolve from the felt needs of the people.

The program should be one

which they understand and help formulate.

Then the peasants will be

really interested in its success.

It will be necessary to remember that,

Extension work is not a "pouring on" process. It is not merely
the "chore boy" Job of discovering a valuable bit of scientific
information and carrying it to the farmer's doorstep. It is
rather the educational process of living end working in the
midst of farmers, of gaining their respect and confidence, of
helping farmers to study their situations and to recognize their
problem, of letting them know what help and information is avail­
able to them, and of helping them to obtain the additional infor—

116

mation and service they need. Extension work Is the two-way
process of getting information end suggestions from the farmers
end of mak ing the host service and information available to
them. To he effective, it must he a permanently established
program based on personal contacts and mutual respect. It
cannot be piecemeal or haphazard. Extension work must be based
on a carefully prepared comprehensive plan.
This plan grows
out of the experiences of local people in determining their
problems and of the extension service in providing solution.-'
The suggested proposals for educational reform in India would
necessitate huge expenditures.

In the past that consideration has

time and again acted as a damper, and despite the clearly felt need
for improving education, little has been accomplished.
that this has been bad "economy-11*

But it seems

Millions of rupees have to be spent

each year to provide relief and other services for many exigencies
which could be avoided, or at least considerably mitigated by having
better education.

Purtherxoore, "experience of war suggests that when

a paramount necessity con be established, the money required to meet
it can end v.dll be found".

'Jar on illiteracy is of as vital impor­

tance as v.ar against a foreign enemy.

India can finance a crusade on

illiteracy and ignorance.
—

--------------------------------

Report China — United States Mission, on. cit., p * 75

35

Report by the Central Advisory Board of Education, Post—War
Educational Development in India, (Delhi, l^bh)

CEAPT3R T U I

POPULATION POLICY
While education is the primary condition for making progress
in any direction, population is the most important determinant of how
far that progress would he conserved, and its fruits enjoyed in the
form of & Letter level of living for the masses generally.

Por there

would he little point in taking steps to increase outputs of agri­
culture or industry, or to divide them more evenly if the inevitable
effect were a disproportionate growth of population and a consequent
reduction in the share of each.^*
We have seen that although the average density for the whole
country is 2^7 per square mile, yet in terms of the cultivable land
and effective utilization of resources, there can he little douht that
India, with nearly U00 million people, is an over—populated country.^
Some authorities, however, are of the opinion that with full utiliza­
tion of all her waste lands and with increased efficiency of present
tillage, India could support a larger number."1 Gandhi went so far as
to say that India could support twice as mans' people.^

This, however,

1
?de—

Sc-°P.oinlc Society, (Hew York;

Henry Holt, 1931),

2
Muker.lee. Population Problems in South-East Asia. (Allahabad;

Kite-

"Chandrasekhar, op. clt., p. 79
Young India, April 2, 1925, quoted hy Gyan Chand, India's Teeming
Millions. (London; George Allen and Unwin, 1939)
117

lie

is no comfort whan already at leeet 30 Per cent of tho people go
hungry or undernourished, while the remaining maintain themselves
at a very low level of living.

She increasing pressure of popula­

tion, Judging from the trend in the past two decades, is bound to
aggravate the situation.
Even if increased production keeps pace with the growth of
population, it won't be a satisfactory state of affairs since the
level of living would continue tc be low.
Chose economists who pin their faith on industrialization
end wasteland that might be brought under cultivation, may be disap­
pointed.

It is extremely doubtful whether industrialization can pro­

ceed at a pace which will absorb any significant proportion of the
almost 60 million incresse India will have between 19^-1 and 19^1, if
k

she continues to grow at the rate of the past decade."

Even a very

rcpid rate of industrialisation, as experience in Japan shows so clear­
ly, can accomplish no more than merely to offset the increase in popu­
lation, without improving the level of living.^
In regard to bringing waste land under cultivation, 200 to 250
million acres classed as cultivable waste has never been brought under
cultivation, and therefore, its agricultural value is problematical.^
Moreover, the mere existence of a productive resource capable of being
used Is n o t

sufficient evidence that it is, or ever could be, worth­

while to make use of that resource.

g“■ 1 ........ ■

It might not be desirable or eco-

■■■■■■■■■■

Thompson, Population and Peace in Pacific, pp. 22^—PPS
R a y m o n d T. Moyer. "China's Agricultural Improvement Program", Foreign
Agriculture, Vol. 11, ITo. 10, p. 133
----^Sir Bryce Burt, quoted by Mukerjee, Economic Problems of Modern India,
p. 126
'

119

nomicelly feasible to cultivate every scrap of 1 and on which any pro*"*
duce can be grown or even put ell land to any sort of productive us©*^
7/1th zooet of the people of India living at a subsistence level,
it is essentiel to raise the level o f

living to a point which gives

them a reasonable chance for a healthy, cultured and full life*

All

that we as a nation have, or can have, should be devoted to raising
the level of people and not in trying to support a larger population**^
Of course, in the matter of crop yields, there is considerable
room for improvement*

With better seeds and more efficient cultiva­

tion, yields from crops might be increased from 30 to 50 P©r cent,
according to the locality*^

As to bringing new land under cultiva­

tion, even i f we accept the most optimistic estimates regarding a poss­
ible increase in tilled area by about 60 per cent, it is hardly likely
that this nev: lend would yield more than one-half to two— thirds as
much per acre ts the land now in tillage*^

This might increase the

total supply of food only from one-fifth to one—fourth.

12

Thic progress, however, can be achieved only very slowly.

If

the population continues to Incre.se at the rate of 15 per cent in ten
years, as in the last decade, India will ha.ve a population of 6S0
millions in l^Sl.

This would leave only one-fourth of the increased

-----------------------------------

1. P. H* Cole, Economic planning, (TTew Y o r k ;
A. jt. Knopf, 1935), P* 21
o
"lyan Chand, Teeming Millions, op* cit,, p* 315
10,.
----J^uherjee, Zconomis problems of Modern India, p. 126
Thompson, Population and Peace in pacific, p. 23I*
12
—
--------------------------------------------------Ibid.

120

production for “better living,

furthermore. If India* s economic situa­

tion improves at a fester rate than in the past, there is a good reason
to believe that her population will also grow at a faster r a t e * ^
Thus, improvement of Indian agricnltuxe, even at the most rapid
rate feasible, cannot do much to improve the level of living unless at
the same time the Indian people telce measures to reduce the birth rate*

ill

So if poverty is to be abolished and the level of living is to be relsed,
„ India must exercise some control over the growth of its population.
furthermore, over-population is a standing danger to the liberty
of the people and democratic way of living.

"Increasing density of

population means diminution of freedom, more intricate and expensive
organisation, loss of community self-reliance and multiplication of
centralized and pre-emptory social controls."1^

While on the contrary,

the control cf population tends to make less of other controls necee—
sary by reducing the problems that confront humankind.

So control

of population is also desirable for other than purely economic reasons*
As to emigration as a method of providing relief from over-popu­
lation, the authorities agree that pressure of population cannot be re­
lieved by this method.

Even if barriers to population movements were

removed and sparsely populated countries were willing to accept emigrants,
which is not l i k e l y , e m i g r a t i o n could not be on a sufficient scale to
neutralize the increase in population.

13 ..

.......... .

Ibid., p. 2 3 U
lUIbid., p. 235
15
A. 3. Wolfe, "The Optimum Size of Population", Population Problems,
(Id.) L. E. Ihiblin, (Houghton Mifflin So*, 1926), p. 73
Guy Irving 3urch and Wilmer P endell, population Roads to Peace or War,
(Washington, 19^5)* P« 122
^ H . Wright, Population and Peace, (Few York* Harcourt, Brace & Co.,

1923), p. 2S6

121

So

the difficulties, dangers and miseries attendant on over­

population are to be abolished vdthin a reasonable period, it would be
far better to help the process, so to speak, at both ends— by reducing
the birth rate at the same time steps are taken to accelerate economic
IS
and cultural development**
Control of births is not repugnant to the ideas of the people
of India,

Contrary to a general belief, attemp-ts at controlling births

have been operative in the history of India from time immemorial and
have often been successful in keeping down the growth of population,
No doubt it is true that according to tradition and religion every Hindu
must marry and beget children, especially sons to perform one's funeral
rites lest one's spirit should wander uneasily in the vacant places of
the eorth,^^

Although girls must marry before puberty to avoid social

obloquy,^ various practices tending to check growth of numbers have
prevailed in India for centuries,
(a)

The practice of Brahmacharya >hich entailed celebacy on

young people until the age of 25*

Of course, it never became a general

practice, but quite a few people were affected by it,
(b)

Voluntary abortion has never been unknown in India,

21

Though,

of course, it was always tinder social opprobrium, it has been a common
means of avoiding too many pregnancies*
(c)

Infanticide, particularly of female children, has been quite

common.
is

^opu^a 't;*on» Psychology and Peace, (London*

Watts & Co,,

19
*
P, h. Wattcl, Population Problem in India, (Bombay* Bennet, Coleman &
go.. i93’+), p. 2i r ----------- --—
g^H* Risley, People of India,(Calcutta;
Thacker, Spink & Co,,
1915). P* 151
Kukerjee, Pood Planning for Four Hundred Million, pp, 217-21g

122

(d)

Prolonged lactation lias teen almost universal and must te

recognized as an appreciable factor indicating a desire to Inhibit the
growth of population.
(e)

pp

Taboos regarding sexual intercourse at certain tiaest e.g.,

child birth, at new and full moon, during monthly period and so o n have
been generally prevalent.
(f)

renunciation of Ham (or lust) and ejqphasis on self-restraint

as part of the philosophy of life has had a considerable Influence on
certain groups of people.
(g)

Though early marriage has- been in vogue, in a quite large

percentage-of the marriages actual consummation has to be delayed con­
si d e r a b l y . ^
(h)

The custom of hyperg&my, particularly in Eastern Bengal,

which enjoins the marriage of a girl to a man of higher class (not caste)
and the practice of huge dowry have made it difficult for some girls to
find mates at all, or at an
U)

Taboo on widow

ing the birth rate at least
(j)

early date.

p Jl

marriage has the practical effect ofreduc­
by six births per thousand.^-*

Even contraception was not unknown.

The ancient Hindus had

expounded sex knowledge in detail in "Xoka Shastra", which not only con­
tains the v i e w on sex psychology,

sex union, and sex hygiene, but also

methods to procreate male or female issues at will, as well as some physio­
logical and mechanical devices of contraception.
£%>

’™ "

111"" "

Jather and Beri, op. cit., p. 6j
Xbbetson, Panjab Census Report, —
1SS1,
- (Lahore)
Jather and Beri, op. cl£.« p. 6S; K. L. Darling,
Prosperity and Debt, ft. *TP
25
.
Jather and Beri, op. c i t . , p. 6S

The Pan jab peasant in

123

The prevalence o f these practices indicates that there is no
reason to suppose that attempts to control population would meet with
stronger resistance or opposition than they have met in Suropean
countries.
l-Iany writers have magnified the liqportance of religion or phil­
osophy of living as a serious obstacle towards conscious control of
population.

But this, as Penrose has shown in the case of the Japanese,

seems to be based on wrong observation.

He rightly observes that be­

getting of posterity as a religious obligation end duty to ancestors
"is probably, in most cases not a direct product of a sense of •funda­
mental obligation* but rather is a by-product of mental relations among
those who lack knowledge of birth control methods.*

pC

In fact, Mrs.

Sanger, when she visited India, found practically no religious oppo sitlon to birth control.

27

In the past the birth rate has been fairly^'well balanced by the
death rate, end positive checks such as disease and famine prevented
the growth of population.

But now, with better health and medical faci­

lities, unless something is done to check the growth of numbers,

the

falling death rate threatens to result in a substsntial increase of the
total population.

Obviously,

something needs to be done.

While this

is not disputed, there is a considerable difference of opinion regarding
whet must be done and how it should b e done.
This, however, is not the peculiar difficulty of this problem.
It is a part of the universal controversy regarding the desirable means
-----------------------------a . r. Penrose, Population Theories and Their implication, (Pood
Hesearch Institute, Staniord University, 193U), p. 115

Plug el,

p.11^4

to achieve human ends, on which the philosophers have never agreed and
probably never will agree.

Yet some action is called for.

A policy

or program of action may not he logically or ethically 100 per cent
sound, yet the alternative might be more disastrous.

Whether we like

or not, we have to face the evolutionary turn of events and certain
practices have to be accepted.
V/ith these two considerations in mind,
may he

let us see what can and

done to restrict the growth of numbers, as well as to raise the

level of living of the people.
(a)
lem.

Self-restraint cannot he a solution of the population p r

Old taboos have never been universally operative, and with an i**-

creased knov/ledge and critical approach to customary and traditional
practices, these are hound to weaken.

whatever the force and sanction

behind these might have been in the past, they cannot stand the test
of scientific Inquiry.

They will go and must go.

And it is useless

to mourn their loss.
3 rahmac harya, or self— re strain t, will continue to appeal to the
philosopher and the ascetic.

Sut it hes never been generally effective

end never will be, opposed as it is to one of the most vital urges of
life.

Physically it is found to be dangerous, while morally it is of

dubious value.

Brahmacharya rests on the assumption that reproduction

is -the only aim of sex activity, while in fact
reproduction is only a secondary matter, the real aim so far as
individual is concerned is the attainment of physical pleasure
which he conceives as a vital need...the average person must
lead, a normal sexual life, otherwise he becomes neurotic or
pathological in his outlets.^®
*
,
A. A. Brill, wSex and ?,eproduetionw , Proceedings Sixth International
reo-malthusian and Birth flontrol Conference, 7olT 5t (iTew York, 19?5)»
P* 6U

Long abstention when attc.ine.ble nullifies a primary object of
marriage and. produces such nervous tension and irr it ability as to
destroy marital happiness.

In actual practice it is found to aggra­

vate prostitution and sexual irregularities.^

"As a cure for over­

production, it is like suggesting the cutting out of the stomach as a
cure for hunger; both have equal chances of being adopted.*^
(b)

By end large, abortion was and is one of the important

checks on population grow t h . ^

Thompson believes that in pre—IT&zl

Germany the number of abortions exceeded the number of births.^?

While

in America, JCosmak has estimated the ratio of abortions at one to every
2.5 births in urban areas and one to every five births in rural districts.
Abortion and infanticide, however* are morally repugnant to
m o d e m men.

It may be necessary to resort to abortion in certain cases,

but it is dangerous and expensive to be advocated generally.

Neverthe­

less, abortion reeds to be made legal to prevent the evils and misery
that attends cases when it is secretly attempted.

The fact that it is

a common practice and is practiced even against the lew is sufficient
justifice.tion for taking a more realistic attitude.
(c)

sterilization ie a very controversial issue.

The philoso­

phers and moralists will continue to argue until eternity about its
moral justification.

Yet we do not always wait till the philosophers

59---------------------------

S'. E. Eenkin, "Birth Control", Encyclopedia of Social Sciences, Vol. II,
PP» 555-5
30
Jather and Beri, op. cit., p. Si

31
32

Thompson, Population Problems, (l£*+2), p. &

ibid.

—

----------------- -

^Landis, population problems, (lTew York;

American Book Co., 19^3)• P* ^7

126
are unanimous.

In cases of certain mental and physical ailments and

defects, it seems necessary to protect the health of the progeiqjr
the future generations.
him,

Since it does not harm the individual or unsex

it is not a punishment, hut a protection.*^
However, it is a dangerous

as a

and

weapon and as J. B. S. Haldane argues,

eugenic measure it is open to question because of the difficulty

of judging who is a defective, and

our ignorance as to what cruses ab­

normality*-^
It seems, therefore, that cl though under the present stage of
our knowledge, sterilization should not he used as a consulsory eugenic
measure, it might he used in clear cases of mental and physical disease
which could he inherited.

To prevent any abuse, however, a unanimous

verdict on the part of a commission of experts should he necessary.

As

a voluntary me&eure it needs to he encouraged through proper education
and facilities.
(d)

The subject of birth control through contraception has been

discussed so muck during the last generation or two, that it should he
unnecessary to recapitulate the pros and cons of the matter.

However,

the following observations would not he out of place.
(i)

Experience has shown, and expert opinion has confirmed,

that contraceptives are not as harmful as ves generally predicted.

The

alternative of over-population in India Is more harmful and it is not
irrational to choose the lesser of the two evil3.

Of course, it is un-

— -------------------------3 Paul Popenoe. "Intelligent Eugenics."

Forum, July 1935* P* 26

quoted by J. A. Syan, "Fertile Immorality,"

Forum, July 193^# P* H

127
natural, “but so Is the wearing of clothes or cooking of food or taking
medicines*

Civilization itself is nothing hut a story

man *s control

7 fT

over nature, mainly by mechanical means.-'

As to any ill effects, they are probably slight, limited to
individual cases or to particular devices and tend to he offset by the
general progress of medical science.

The fact is that with wider use

of contraceptives the health and longevity of women have increased *»«d
infant mortality has d ecreased. 37
(ii)

It is effective in checking the growth of population.

Studies made by Pearl, iiyrdal, and Penrose show that there is a direct
relation between fertility in different people like Americans, Swedes,
Japanese, etc. end "human control".-'
(ill)

Birth control might encourage immorality and frivolous

living to some extent, hut the "harm done by over-population would fer
outweigh any minor evils which might attend whatever way was selected
of keeping the number of the people within bounds."^

results of

leek of birth control are certainly more harmful.
On the contrary, there is the possibility that tendency to
immorality would be checked by better satisfaction, since it is really
llQ
marred
sz rc tion which is largely re sponsible for immorality.

British Committee on
Encyclopedia, of Social
37
*Ibld.

Ethics of Birth
Controlcited in "Birth Control",
Sciences, op. cit., p.550

^ landis, op. cit., p. S5
^Leonard Darwin, ’./hat is Eugenics, p. 35
W. A. Pusey, "Medicine*s Responsibility in Birth Control Movement",
Proceedings of Birth Control Conference, Vol. 11, p. 27

128

(iv)

Use of contraceptives is not oon trary to the ethics

India or inconsistent with Indian wisdom.^
(v)

Whet is perhaps more important is that use of contra­

ceptives is coming to India*

Prom one country the movement has spread

to another and all the philosophizing of saints* moralists and others
cannot check its infiltration.

Therefore, it would he a part of wisdom

to accept "birth control and thus save the country much misery.
All these methods of restricting population growth* except
compulsory sterilization* vrculd he voluntary measures.

Their success

will depend on how soon and how effectively we can Influence and edu­
cate the messes.

But thi3 alone would not he sufficient.

tive public policy would he necessary.

A more posi­

Increasing numbers create social

problems of very serious nature, and so reproduction is not purely an
ho
individual affair to he left to the whims of married couples.
Policy for India

Landis is not optimistic about governmental policies in the mat­
ter of population and argues that "in a field where personal behavior
is in considerable part a function of more subtle cultural values, it
is difficult to accomplish rational objectives through national policies.1^
Yet it seems to he true that social and cultural behavior of an indi­
vidual is the result of early conditioning, and through proper control
and environmental influences it is passible to make the individual ac­
cept the objectives of national policies.

In fact, Landis himself at

another place admits that "the fertility of a race or nation depends on
in
1"
P. D. Shastri, HThe Outlook in India", Proceedings of Birth Control
Conference, op. cit., p. 121
Ij!j>---------------------,
^Thompson, Plenty of People* op. cit., p. 204
iendis, op. cit.* p. l 6l

129

e great number of social variables which can he considerably regulated*
Consequently, governmental policy has a definite place in controlling the
growth of numbers.
In order to check or reduce the growth of population the govern­
ment might adopt various measures.
(sO

Raising the age of marriage.

Gal ton estimated that marriage

of women at the age of IS will result in twice as many children as one
at the age of 28.

hx

Similar conclusions have been reached by other in­

vestigators.

'Theoretically, therefore, it appears to be a very effect­

ive policy.

But actually it may not u-ork, or may be attended by greater

evil s*
In India the S&rda Act of 19^9 has attempted to raise the age at
which boys and girls can be married.
letter.

But it has been all along a dead

Of course, it was not aimed at restricting numbers, but it

shows hew difficult it is to enforce social legislation for which people
are not prepared.
Eowever, even if such legi slation can b e effective, there are
other considerations which have to be carefully studied.

Late marriages,

if not accompanied by moral restraint (which itself might be dangerous
to physical and mental health), may lead to young people seeking satis­
faction In extra-marital relations.

If continued for any length of time,

this wo tild be detrimental to the stcbility of marriage at a later time.
Koreover, late marriage, when the habits and attitudes of persons have
been definitely set, might hinder smooth" adjustment to each other* s per­
sonality, which is comparatively easy during the adolescent period when

ra.
1+5

. 55
Davis, Barnes and Others, An Introduction tc Sociology, p. 351
p

130

1)0 th tody and mind axe more plastic a s well &s readily adaptable.
In India there would he an. additional danger.

Unless young

toys and girls have opportunities to cooe together and get Msubli­
mated satisfaction for their libido” through common games, dancing and
other pursuits, late marriage might lead to greater prostitution, irregular relations and development of homosexual proclivities.

Whether

the present segregation of the tvc sexes would disappear with the
spread, of education, it Is difficult to say.
year?.

Anyway, it will take

So under present conditions, raising the age of marriage is

likely to raise more problems than it will solve.
In fret, late marriage which involves both continence and celebacy during the period of human beings* life when the sex urge is usual­
ly the strongest, has proved ln£>ractical as a means of population 11mltation.**^
(b)

prohibition of Polygyny.

'Though there are no statistics

as to the extent of polygyny and probably it Is not so common as fre­
quently suppo sed, there can be no dotibt that polygyny is & factor in
over-population.
(c)

Up?

Compulsory Education.

!This would make having many child­

ren a liability rather than an o.sset.

They would not be able to work

in the fields or factories to supplement the Income of the family.

On

the contrary, they vrill have to be fed properly, decently dressed, sup­
plied with bocks, etc.

Education might act as a deterrent, particularly

when the people, through education and propaganda, axe supplied with

"Birth Control", Encyclopedia, of Social Sciences, p. 5^0
_ Burch and Pendell. op. cit., p. 7
l|g
liukerjee, Eood Planning for Pour Hundred l-llllior.g, p. 225

131
knowledge o f

how to control b i r t n s .

(d)

Birth Control Knowledge and Facilities.

The boys end

girls ?t the marriage age, both inside and. outside the school, through
teachers and extension workers, night be subjected to an extensive and
effective system of propaganda for birth control.

In order to be fruit­

ful in a snort period of tine, this propaganda will have to be in the
form of a crusade.

Such a crusade would be more advantageous than one

against the mosquito, litigation, extravagance on marriages and other
ceremonies, etc.

If a crusade were started against having too many

children, :.any of the minor problems w u l d be easily and perhaps auto­
matically solved with reduced numbers*
properly indoctrinated,

Uhen one generation has been

there would be less trouble with the next.

It

will also be necessary to provide free advice on birth control in the
hospitals, clinics and dispensaries.

But all this will be of no avail,

if the cost of contraceptives remains very high.

So something will need

to be done to make contraceptives cheap and easily available.

For the

very poor, who usually have a larger number of children, it will be
desirable to supply contraceptives free.
(e)
sxeas,

Urbanization.

India has too many people in the rural

Whatever the poets and lovers of rural life may have to say for

the glory of living in open spaces, it is also true that such a life
makes the cost of transportation, education, aospital and medical aid
too heavy.

Besides, rural life does not provide all the stimuli neces­

sary to develop the mind of a child who has to live in a modern world.
Of course,

there axe disadvantages in the city life, too.

But

most of these can be remedied and provided against in the light of the
past experience in other countries.

The cities can be made as healthy

*3*

m

the rursi areasi

In the past, cities hare been allowed to grow p w^

expend haphazardly, without consideration of sanitary and hygienic eeft**
ditions.

That need not necessarily happen in the future.
Social Securj ty Measures.

(f)

The introduction of social

security measures in the form of employment, and old age insurance,

5
would reduce the dependence of the parents on the children, and would
diminish the desire of the parents to hare many children to support
them in times of siCjmess or old age when they would not be able to
w o r k .^9

Optimum Population and Policy
Some thinkers cannot conceive of a population policy without
the concept of the optimum.

Therefore, it may be necessary to examine

this concept to find out if it has anything to contribute to population
policy in India.

whatf"

Optimum means best and as such implies the question}

"Best for

Th which there can be as many answers as the possible

goals a

society can have.

Thus the optimum may be*

(i)

What is the most desirable number from the point of

view of the military, defense, or
( ii).

What is the desirable number from the point of view of

imperialistic glory, or
(iii)

What is the desirable number to utilise the present

resources of the country, or
( iv)

1/hat is. the best nuabei’ in view of the potential wealth

of the country,, or
(v)

-v/hat is the desirable number to preserve a certain stand-

w r --------------------------------

*>• K. Bo eke, structure of Netherlands1 Indian Economy, p. 157
<Pew York t Institute of Pacific Bel ations, 19*fiJ

133

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" T h e
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T h e o r y

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i b i d . , p.

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o p t i m u m

l i g h t l y

r e c e n t l y

-he

" s p e c u l a t i v e

j u d g i n g

P o p u l a t i o n

G o t t l i e v

" o n e

a

P r o b l e m s ,
i n

p .

t h e
i s

c h a l l e n g e d ,

m o d e s t

" v i c i o u s

S o r o k i n ,

m e r e l y

i m p o r t a n c e

p l a c e

s.

M y r d e l ,

P o p u l a t i o n
a

o n l y

( J e n a ,

i s

s c i e n c e "

v a l u e

to

1 9 3 3 ,
1 3 3 ^ ,

o f

X V

A n d

s p e c u l a t i o n *

a n a l y s i s *

e n d

h 0 2 ) ,

p .

o f

a s c e r t a i n
m a g n i t u d e

b e e n

B e r o l k e r u n g si e h r e

1933.

S 8 ) ,

h a s

c o m p a r a t i v e l y

c o n c e p t

o u r

w o u l d

u n d e r t a k i n g .

S e r k a r ,

K o m b e r t

t h a t

x^hich

av.oronicu.ite

R e s e a r c h ,

X .

" w i l l — o — the-vrisp"

c e s s e s

h a s

attach,

s u a ; a r i s i n g

c o n c e p t

m a t t e r

i T a t i o n a l o k o n o m i e "

i z a t i o n

i n

i t s

t h e

(B.

l $ h l ,

( P a u l

o n

f r u i t l e s s

P o p u l a t i o n

F a m i l y ,
,/ert

a

r a n g i n g

s c i e n t i f i c *

M a r s h a l l ,

p e o p l e

o j j t i n u m

resesxch.

l i g h t

*c h i e f l y

d e e d e d

t h e o r i s t s

o f

a n d

G o t t l i e v ,

p r o j e c t

v a l i d i t y

c u s a t i o n s
i t

w a s

m a n y

s e y s t

f o r m a l

m u m

so

J o u r n a l

o f

P o l i t i c a l

E c o n o m y ,

13*

This does not pro^e,

however, that the optimum is either object­

ive or quantitatively aeasiax-eble.

Sssentirlly, it seems that optimum

is a value concept as '«olf©5^ argues so effectively, end is therefore

53
relative and sxfbjective.*^
Sven if* we <UsregS-r*dL the political, morel and religious value
considerations (not that it; is actually possible or desirable) and
define optimum in purely economic terms, we are in no better position.
Let us examine some of theae^atteapte.
(a)

It has beer. a B s erted that optimum represents the most pro­

ductive ratio between population and natural resources.^
(b)

It is believea. that optimum number is one which brings

about the largest per capibn production and consump tion.-^
(c)

It has been a r g u e d that optimum number is a point at which

the population is neither b o o great nor too small, but is such as to
secure maximum returns per hiead under the given conditions.'
(d)

It is contended! that optimum number is one v.hich assures

57
the maximum economic velfax*©."'
(e)

It is suggested that optimum number is one which ensures

rS

greatest per capita real income."

.

----

Wolfe, "On the Criterion of* Cotimuia population," American Journal
of Sociology. 1-rrch 193** P P « “oS-5^9
53
Penrose, go. cit., p* 50
5I4,
~
23. A. McCabe, Lester and Dell, Population. Labor and Social Reform.
(Boston; Little Brown & C o . . 1937). o. *3

PTC

Wolfe, op. cit.

56

L. Sobbins, "The Optimum Theory of population", London Sssays in
Economics. (2d.) T. 3. Gregory and H. Sal ton, (Londodj Hoti.tx4a£e, ±927),

jT H ii—

Hugh Dalton,
p. 30

58

"The Optimum Theory of Population", Sc ono mica, Kerch 19?fi>,

Carr—Saunders, Population problems, p. 200

135

If we examine these concepts, ve find that each poses issues
which are not es^sy t o r e solve.

The most productive ratio he tween

population and resources depends, among other things, t^on the stage
of technology which, is ever changing and developing.
cannot "be a fixed point which we can call optimum*

Therefore, there
Moreover, owing

to certain rigidities and lags the most productive relation actually
may not be realized.
As'regsrds the second definition, I-.ukerjee cogently points out
that even the largest per capita production and consumption of goods
may mean disparity of wealth.

The social consequences may be unequal

opportunity, low vitality, bad morale, absence or misuse of leisure and
social unrest,

Sven from a purely economic point of view, the defini­

tion is unsatisfactory as there may be a great waste of manpower and
59
re sources.^

furthermore, there remains the economic problem of how

far the maximum production and consumption will jeopardize the inter­
ests of future generations.
The concept of maximum returns per head also depends upon the
stage of technology and this cannot be predicted.

Moreover, how far

the maxi mum returns will deplete the natural resources will be another
difficulty to overcome.
Sconomic welfare Itself is a value concept.

Not only ere there

differences of opinion as to what constitutes economic welfare, but
also as to the degree of economic welfare which would be most desirable
to achieve.
59
...... Mukerjee, "On the Criteria of Optimum Population", American Journal
of Sociology. ITov. 193^, p. 3^6

136
The fifth definition given r h o v e also has several defects*
Maximum per capita re&l income Is nr*. average and. consequently does not
indicate the distribution of the good®produced.

Extreme Inequality of

wealth and income, even with maximum per capita income, can still mean
near-starvation of the mass of the people*

furthermore, the rate of

increase of per capita income actually can be considerable while its
absolute level is still very low* ^

Again, a part of a country*s total

production (reel income produced} m a y consist of war materials and
other goods that do not benefit cons-umers*
Thus even economic optimum i s not so simple a matter and there­
fore some population theorists, otherwise favorable to it, tend to re­
ject it as a basis for practical population theory.
Kukerjee, however, seems to g i v e the inures si on that while it
may be difficult to calculate the o p t i u m , yet it is comparatively easy
to observe v/hen it is absent.

U’sin.p an analogy from the study of ani­

mal life, he argues that among flies and bacteria the average duration
of life tends to diminish progressively as a certain optimum density
is overstepped.

The same may be expected in human groups* So we may

Judge whether a country is over-populated or not from the general life
expectancy rate.
But longevity seems to depend, greatly upon medical science and
the extent of knowledge of healthy living as well as the resources of
a country,

'.re can conceive of a country very rich in resources with

low density of population, but where
the death rate is high.

the average life-span is low and

Longevity seems to depend more on fortunate

climatic conditions and a healthy v;ey of living rather than upon the

Btr------------------------Penrose, op. cit.,

p , 52

density of population.

It will have to he conceded, however, that

when a population oversteps a certain limit, even under the heat cli­
matic conditions and knowledge of healthy living, longevity may de­
crease*
Etus it -is clear that the concept of optimum population offers
little'as a guide to policy*

v.'e cr,r. he guided hy some signs.

Iilf# ■■

expectancy seems to he one of them, as it can indicate if the popula­
tion is overstepping the current resources and some thing must he done
to check it.

It may also suggest whether the size of the population

is falling short of the hest development of the resources end therefore,
it should he boasted.

As to exact calculation of the optimum, or even

a close approximation to it, we shall have to wait till the science of
statistics becomes more perfect.

In the present state of our know­

ledge, human -motives, operations and capabilities* defy mathematical
prediction.
So. the concept of optimurn. may have some use in formulating- \”
long-range population policy.

But in .India the problem is not one of

finding out the Hright* number that can be supported with full utilisa­
tion of resource's,

lor India, which is daily faced with the problem

of hunger and famine, the problem Is how" to stop the growth of popula- .
tion.

Its present rate of increase means inadequate food, poor health,

fir

low efficiency for a vast majority and'..starvation and death for many. OJ*
So those seeking to improve the level' o f .living of the people of India,
some abstract figure related to maximum utilisation of the resources of
■

Helen P.. Hinasa end kr. I. Batten Hr. have estimated that since the
beginning of the century about JO million people have died o f .starvation
in India. Population Pressure. War and Poverty. (Newarki Arthur W*
Gross,; l$h5)» p. 3^
1
Ti;.""vr 11 .

13«

the country- would not serve any useful purpose.

‘
..he t Is laore important

Is to reiiioiiibor that "one 31rcumst•nce (which) vould appear to stand
between Indian cultivator and his ntieinn^nt of a standard of life and
coiafort higher than that which at present he hnows...is the tendency to
offset and cancel any increase in wealth by an immediate increase of
population,
52

Linlithgow, op. cit., p. 17

CHAP SEE IX
IITDUsTSIhl POLICY

The need for industrial development, side
in the agric'.il turel system, to raise the level of

"by side with. reforms
l i v i n g of the

antry, cannot be over-emphasized in s country Hire
First of all, no significant change can "be

peas­

India,1
effected in

'fch.e

level of living- of the peasantry, unless some p r e s s u r e on land I s re­
lieved by tricing a considerable number of people a w a y
ture.

p

from agricu l -

Industrializs.tion alone seems to offer tlxa>"fc avenue.
Secondly, the level of living of the per s a u t r y cannot "be raised

without augmenting their income.^

In view of the v e r y uncertain de­

mand in the international market, this could he p o s s i b l e only if* there
is a good stead2r market for the products of agricnl "fcxire within
country.

Extensive industrialization would require

raw material s and

create a reitunera tive market for agricultural p r o d u c t s .
viding good vr.ges to the laborers industry creates

tJiie

Also "by pro­

s m additional, de­

mand for food and food products, thus helping the peasant,
Thirdly, the joint development of agricul tixx-e and Indus try,
by increasing the national income, and enhancing ■tire taxable cap»a.city
fsir p. Thakurdee and others!" A Brief memorandum O-uffclining a P l a n of
economic Development for Indie," (IJew Torkr ’ ^enguin Books, 194^1^
“"Brij Farcin, Indian Economic Problems, op. cit., V o l . II, p. 1 3 9
H. Boeke, Structure of ITetherlrnd1s Indian E c o n o m y , (Few Yox*Ics
Institute of Pacixic delations, 1^4^), t. it&

139

140

of the people, enables the state to finance many schemes for economic
and social uplift of the people, which otherwise might he held up for
went of funds.

Daus "better schools, "better hospitals, "better means of

communication and transportation may "be made available.**
Pourthly, through direct and indirect influences of industrial
development, the peasantry 1 b exposed to idea.s of change, initiative
and progress.

3his helps to lift the pee sentry from its traditional

inertia, conservatism and static life.

5

fifthly, industrialization is an imperative necessity from the
point of view of national self— sufficiency and defense.

In view of

the trend of nationalism everywhere, India cannot afford to do other­
wise, even if it vsere undesirable from the standpoint of economic
efficiency.
However, the present situation with respect to industrializa­
tion, though considerably Improved recently as the result of the wax
stimulus, is anything but satisfactory.

She following table shows

that in 1541 only 10.3 per cent of the total working population was
engaged in industry.

Jather and Beri, on. cit., p. 495
"’ibid. , 496

1^1

TABLE XVII
I L D I A 'S VOEKI1IG- POPULATION BY
0 CCUPA T I0 1‘TAl LI VISIONS, l^Ul

Occupation

l-Tumber

Source:

Cent

65-6
1 0 .5
7.5
5-5
5-0
1 -6
1.5
1 .0
O. 6
0-5
0.5
0 .2
H
.
0

Agriculture 1 pastoral pursuits
lO9 .73O.72S
Industry
17.523.PS2
Domestic service
12,67^,110
Trade
9,336,969
Insufficiently described occupation
M9S.689
Transport
2 ,788,520
Professions 1- liberal arts
2 ,7?U,i66
Unproductive (inmates of jails, asylums,
1.7US.735
etc. )
Public adrr.In.ietrat ion
1,153.963
Pishing d- Hunting
1 ,029,536
Public service (Army, police, etc.)
91+1,323
Exploitation of minerals
40^,262
Persons living principally on their
income
280,955
lb tal
166,836,99s

Per

IOO. O

Chandrasekhar, op. cit., p. ^9

Of the 1 J *5 millions classified under industry, l e s s them
two million were engaged in organized industry, i.e. i n f a c ­
tories or industrial establishments employing twenty o r more
workers.
The number of workers employed in large— s e e d e i n dus­
tries of ell kinds was 3*531,000, made up as follows!
factor­
ies, 1,5^0,000; plantations, 1,080,000; railways, 7 7 7 > C O O ; and.
mines, 350*^00*
(It Is estimated that the total ha.e n o w In­
creased to about four million, or just one per cent o f the
nonulation).
The rest were engaged in small-scale o r c o t t a g e
industries or were individual artisans or craftsmen w o r k i n g on
their own, mostly in small areas as part of the a g r i c u l t u r a l
cornunity*7 Of the small-scale industries, hand w e a v i n g is the
largest unit.
This industry supports nearly tec m i l l i o n p e r ­
sons, including 2 ,^100,000 weavers, and 3 ,600,000 a u x i l i a r y
workers.
It is, however, essentially an urban i n d u s t r y since
it Is largely cerried on in towns. Indian Year Book (15*+7)*
p.

7^2

Since 65 per cent of the worker? are in agriculture.

It

Is

clear that we need a considerable shift of population to i n d u s t r i e s
in order to relieve the pressure of population.
V.liile the Importance cf industrialization is obvious,

it

is

necessary to study carefully the tempo and the extent to which. I n d u s —
7*

C h a n d r a s e la h a r , o p .

c it.,

p . 51

lU2

trialization should go* end how it should go in order not to repeat the
mistakes of other countries.
If tne economy of e country is net to he unset hy neriodic de­
pressions with their resulting unemploynent end misery, some control
will need to he exercised over the development end working of the indus­
trial sector of the economy.®

It would also he necesearv to control

and guide the industrial development in order not to repeat the evils
\

of industrial revolution, e.g., concentration of industries in a small
area, the development of slums, uncontrollable sire of the cities, smolee,
noise, etc*
In India, where it is proposed to start industrialization as a
sort of crusade to make up for the lost time, certain other considera­
tions, peculiar to the situation, will have to he weighed carefully and
the dangers properly guarded against.
There is, however, difficulty as to principle.

Vhile there is

unanimity of opinion regarding the need for industrialization, there Is
a considerable difference of opinion as to the form It should take.
,/ith the derth of ha hr tins Gandhi, raueh of the opposition to large— scale
industries ni^ht wane, yet there is a considerable body of people who
share the belief of Gandhi that large— scale industrialization Is the
very negation of the type of living which Indian culture and civiliza­
tion holds so deer. ^

On the other hand, an scope rent majority of the

oeople seen convinced that in the vorld of today the salvation and
security of India lies in large-scale industrializ«tion.

g

“

,

Bensen, op. cit.. Chap* II, pp. 1*+-28
?*t. C. Ihmiariuyra, "Handicrafts and Cottage Industries11,, The Annals
(”ay 191+h) n<he American Acadeurr of political and Social Science",
(Philadelphia), pp. 111—112

li*3

Since the above controversy relateo to a question of values
which cannot be subjected to an objective judgment,

there can be an

honest difference of opinion as to what course of action might lead
to the greater good of India.
However, It seems that those who advocate going back to nature,
as Mahatma Gandhi advocated, are trying to set the clock backward.^
It also seems that much of the onoosition against industrialization is
based on the type existing until recently.

For a visit to one of the

most ir^-t'-'-date factories and its environs will show that much of criti­
cism levelled against large-scale enterprise is not valid today.
There might have been some force in the argument against mecha­
nization where the machine required a simple swift movement on the part
of the operator, which tended to turn him into a robot.
have changed.

But things

The simple, the dull, the heavy, the endlessly repeti­

tive work is being increasingly taken up

the machine, leaving the

more intelligent and rather easy work to be done by the worker.
In a modern air-conditioned factory, such as the textile fac­
tory in Cl am son (S. Carolina), to give a concrete example, circumstances
have completely changed.

The workers talk, move and loaf about, with­

out any nervous strain o r physical discomfort.

They just wait until

the machine automatically stops when something is the matter with it.
Then they set it right and move about leisurely.

In fact, a man in the

office, with a heavy file before him, would envy the abandon of the
worker in such a factory.

10

Lord Linlithgow, op. cit., p. 16

lhh

Since India can profit from the latest research and develop­
ments and need not repeat the mistakes and slow adjustments of other
countries, the opposition to large-scale industry does not seem to "be
rational.

Of course, part of this opposition is due to the ignorance

of the revolutionary changes which have been effected in the last few
years.

The writer, without vied ting the plants, could not have be­

lieved that industrial work could be made as congenial as any other.
Industrialization will come to India anyway whether we like
it or not. Just as western civilization has infiltrated into it des­
pite the laments of the orthodox.

It seems desirable, therefore, to

accept industrialization and make the most satisfactory adjustment to
it.

All the efforts and arguments for a return to the past would only

prolong the period of the crisis and delay what must be done if the
transformation taking place is to give the best possible results.^
Industriallzation being inevitable, and also very desirable,
the question to be considered is how far it should go and in what manner
and at what pace it should proceed.
First of all, it should be realized that there is no fixed opti­
mum proportion between agriculture and industry.
circumstances and is flexible.

12

It depends on many

The history of other countries should

dispel all ideas regarding some definite percentage of population neceesary to work on the agricultural resources of a country.

The United

States began with nearly 100 per cent of the people on agriculture and
has come down to 22 per cent, with the trend indicating a further de­
cline in prospect.

The philosophers and sociologists painting the

beauties of working with nature in idyllic language have lamented this,
n

~
Alberto de Stefanl, Report of International Institute of Intellectual
Cooperation. (Paris, 1932), p. 30
12
Work of F A P , (Food and Agricultural Organization of the United Nations),
(Washington, 19^5), p. 7

lU5

and have drawn dismal pictures of living in overcrowded towns
ing in stuffy, noisy and nerve-racking atmosphere

work-

of the factories.

But as we have seen ahove, recent technical developments have
stolen the thunder from the arguments of the critics of industrializa­
tion.

The beauties of the farmer's life have been painted by "out­

siders11, who didn't get up early in the morning to work in the icy cold
in winter and scorching sun in the suitmer and receive only a meagre pit—
tance as reward for their toil.

As to appreciation of the beauty of

their environment, Joad seems to be right when he Bays that no one who
is broken with toil can be expected to keep his senses open to beauty
and submit his character to its noble and gentle influences.3"^ With re­
gard to farming as a "way of living" there is the testimony of Professor
Ashby who writes "as many farmers and their wivds said— farming is a
rotten way of life."3’** The writer's own study of rural life, in differ­
ent parts of India, is in accord with the observation of the Oxford
economist.
Then it is argued that rural life is more healthful.

But actu­

ally vital statistics from rural and urban districts in Great Britain do
not indicate greater healthfulness in the countrymen.3"^

Though studies

of Sorokin and others show some superiority of health in rural areas,
in the United States,3"^ yet with better town-planning and better working
conditions in the factories* that difference, if any. is likely to dis­
appear.
^0. S. M. Joad, Guide to Modem Wickedness. (London), p. 2h
ill
"
A. W. Ashby, "Social Implications of Economic Progress". Proceedings
of International Conference of Agricultural Economists (193^), P* $9
^C. S. Orwln, The Future of Farming, (Oxford: Clarendon Press, 1930)*
n

5

Pltirim Sorokin & Carle C. Zimmerman, Principles of Rural-Urban
Sociology. (New York: Henry Holt, 1931)# p. 155

1*6

Up to the present the cities have teen allowed to grow without
proper regard, for hygienic and sanitary conditions*

The living room

was insufficient, the hours of work long, the conditions of work in­
sanitary, and wages low*

But there is no reason why a city could not

be so planned and the houses, streets and o ther features so adjusted
as to make the urban home and the city as good as, if not better than
the farm, either as living quarters for men or as places for rearing
healthy

c h i l d r e n .

^

Other conditions of living have been improved con­

siderably and can be Improved still further*
In India, we cannot foresee the limit to which Industrialization
might not go*

The beauties of the farmer's life seem to be unreal.

People should be encouraged to leave agriculture to better their own
prospects of living*

This would also help those who would be left be­

hind*
Some people accept the need of industrialisation, but wish to
take the industries down to the villages rather than have them concenIff
trated in big towns and cities*
Their arguments run on two lines,
(a)

over—crowding and other evils of great concentration in the huge

industrial cities and (b) preserving and helping the village economy*
The first reason seems to have considerable force*

Colin Clark

has estimated that beyond a certain size the services in the town begin
to show diminishing returns and become less efficient*

Other economists

also seem agreed that beyond a certain size, a plant becomes less manage—
able and diseconomies overweigh the economies of large scale*

19

In

India very few towns have grown to that size Clark indicates as optimum*
When towns of a size below the optimum grow, the economies outweigh the
diseconomies end stopping short of it would mean uneconomic organization*
^ Hie hard T. Ely & George S. Wehrwein, Land Economics, (New Yorks Mac­
millan, 19*0), p. 17
-------------T. Singh, op* cit., p* lU*
°Stigler, op* clt*. pp. 13*-13S
______________________________

1^7

MorooTfir, as w© h&vo soon previously, some of tbs disadvantages associ­
ated witli big towns can "be preTsntsd "by hotter plszml&g an^ more ucp— todate hygienic and sanitary provisions*
The advantages supposed to accrue from rural industrialization
are dubious*
Firstly, the assumption that village life is Inherently beauti­
ful and healthful is open to (Question*
Secondly, it is expected that rural industries will utilize the
leisure hours of the peasants which at present are wasted because of
lack of a subsidiary or supplementary occupation*

Oils would be true

in certain parts of the country, but not in others, especially where a
diversified type of farming is practised*

Often the work hours are so

long and tiring that, according to the Judgment of the competent ob-

,

servers, what the peasant needs is more leisure rather than more work*

20

Of course, fanning by its very nature is a seasonal occupation and there
are necessarily busy and slack periods of work.

But during the periods

of heavy work the peasant has to work such long hours and do such stre­
nuous labor, that it seems unsympathetic to grudge him a little respite
in periods of slack work.

It would seem that if the peasant's income
21
is to be augmented, some other means should be discovered*
Moreover, as the Royal Commission on Agriculture rightly opined:
"There appears to be an impression amongst certain sections of
the community that a cultivator can find temporary employment
as and when he likes, in any of the industries which go on
around him* This view ignores the obvious fact that the culti­
vator, within limits, is an expert in his own subject. Just as
a blacksmith, carpenter, or any other mechanic in his* It is

20

1

Darling, Wisdom and Waste in the Punjab Village, p. 256

21Ibid*

148

exceptional cases that the agriculturist can he any­
thing more than unskilled labourers in any industry other than
his own.
Speaking broadly there can be no satisfactory blend—
ing of two avocations*22
In view of the above facts the question that might be posed is.
Whether it would not be more desirable and economical to shift a part
of the rural population to the industrial areas, so that the rest can
carry on full time farming, while those who move to the towns become
full time industrial workers?

The advantages of division of labour and

specialization would certainly favor an affirmative answer.

But a few

objections need to be coneddered*
(a)

It might be said that farming can never become a whole time

occupation and to meet the needs of excessive demand of labor during
the rush reasons, a reserve army of laborers must be maintained.
course, that is true under present conditions.
agriculture would reduce

Of

But mechanization of

necessity of keeping a reserve force of

laborers for busy seasons.

*4oreover, diversified farming can be made

more completely a whole-time occupation, especially by the introduction
of gardening, truck and poultry farming, etc.
By taking industries to the villages both industry and agricul­
ture are likely to suffer*

Industry will suffer because a peasant can­

no t be a skilled industrial worker, and agriculture will suffer because
tenpted by greater rewards in industry the peasant may not give proper
attention to farming*
(b)

It may be argued that specialization is not conducive to

couplete and balanced development of human personality.

This would, of

course, apply largely to the industrial workers, for the people on the
22

~

clt., p. 564

'

~ ~

li*9

farms will have a sufficient variety in the exercise of their abili­
ties with respect to diverse type of farm operations.

It is true that

the work of the industrial worker would be relatively of a simple and
uniform type® but with the advance in technology the hours of work are
bound to be reduced considerably.

The industrial workers will have

ample time and opportunities to divert themselves in the leisure hours
according to the needs of their personalities or the urge within.
(c)

The objection that by shifting too many people from rural

areas to towns we would be drying up the sources of healthy and strong
progeny® seems to rest more on sentiment than on realistic study.

On

the basis of war experience both in England and the United States® the
idea that a large and flourishing rural community is essential as a
field of recruitment of healthy workers for towns no longer holds g o o d . ^
If specialization leads to efficiency and is desirable in other
spheres of life® it should have a place in rural economy.

In fact, on

the basis of past experience® it will have to be conceded that economic
necessity respects no prejudices and traditions.

Sooner or later our

rural economy will have to yield before the onslaught of specialization
which seems to be the order of the day.

If Ignoring this economic neces­

sity and trend® we foster industries in the villages we may soon have
to dismantle these at a huge loss.

For such industries would not be able

to stand the competition of large-scale specialized industries.

If we

try to maintain them through subsidies or inport duties, as is likely to
be felt necessary, this would entail a huge uneconomic burden on the
nation.

C’rwin. ot>. cit., p. 5

150

In fact It is very difficult to see bow* with our eyes fixed
on raising the productivity and level of living of the people, recom­
mendations about making rural economy self-sufficient con be proposed
or accepted.

For it clearly represents a retreat to a more primitive
p)i

and inefficient economic system* ^
Some rural areas are so heavily crowded in the matter of living
space that maintaining all these people there would not be Justified
on any humanitarian or economic grounds,

lb provide more elbow room

and better levels of living, some people need to be shifted to sparsely
populated areas.
Furthermore urban life need not and is not inherently pernicious.
On the contrary
"there are many advantages: cheap amusement, varied society,
hurry and bustle of life and a sense of nearness to the centre
of things; freedom to change Jobs, independence from the em­
ployer, freedom from the peering eyes of the neighbours." 5
In fact "it is significant that countries which have gone fur­
thest along the road to economic Justice and political equality, those
in which individual human righte are most adequately safeguarded and
opportunities for individual development are most widespread, are pre­
cisely those in which urbanisation has gone furthest."^
It seems that the best policy would be to develop industries in
or near the towns.

But once the town grows to an optimum size, further

growth might be stopped.

In building new factories it will be well to

locate them on sites which are not so valuable from an agricultural
p E-----------------------------

Konard Meyer, "Social Implications of Economic Progress", Proceedings
International Conference of Agricultural Economists (1938), p. 59

2**G. D. H. Cole, "Industrialization", Encyclopedia of Social Sciences,
vol. VIII, p. 25

„

26

Condliffe, op. clt., p. 33

151

standpoint.
culture.

India would do well to conserve her best lands for agri­

While nearness to labor supply will have to be considered

In building Industries In the early stages* It must not be forgotten
that In the future, owing to development of technology, less end less
labor would be needed.

Besides, with spread of education and inprove—

sent in the means of transportation labor could easily move to indus­
trial centers.

Furthermore, if the new factories are built In sparsely

populated areas, cheap housing would more than repay the cost of mobil­
ity of labor.
A discussion of general industrial policy does not fall within
the scope of this study.

Consideration of certain aspects of indus­

trialization is necessary, however, as any industrial policy is bound
to have direct or indirect repercussions on the rural economy of the
country.

If a particular policy is followed in one important sector of

the economy, it is likely to be extended to the other spheres either
as a matter of consistency or as a matter of political compulsion or
expediency.

Moreover, the fortunes of the rural economy in a developing

country would be closely tied up with the success and prosperity of
industry.

At is important from a national standpoint that no policies

are adopted in the industrial field which may lead to instability or
depression in industry and thus affect the fortunes of rural econo ny
through no fault of the latter.
Under the present situation, there are no colonies to be settled,
no extensive foreign markets to be exploited and no outlets for surplus
dumping.

Whatever the gains of laissez-faire in the past, the progress

and development of Industry now will have to be guided carefully in
accordance with the needs of the country and the world market.

To pre­

vent over-production and consequent depressions, some type of inter—

152

national agreements would be necessary for commodities entering the
foreign trade, while in the case of comnodities for internal constunp**
tion some control over their production also will be necessary.

At

the same time the tendency towards limiting production to reap monop—
oly profits will have to be curbed so that wants of people may not go
unsat isfled*
Tor the achievement of these purposes, the policy of ladssez—
fad re cannot be depended upon.

Laissez-faire has failed to achieve

the best allocation of resources and ensure the maximum satisfaction of
human wants.

Thus a different policy will be necessary.

Hhe following

alternatives have been suggested in this connection:
(a)

Nationalization of all industry.

(b)

Creation of an Economic Advisory Commission to coordinate

and maintain a proper balance in economic activity.
(c)

Voluntary agreement on the part of business.

Nationalization of the industry is supposed to achieve the
following purposes;
(l)

All industries can be Integrated In a well—developed

plan to ensure the best utilization of the national resources.
(id)

Production would be carried on in relation to wants

and therefore on one hand over-production would be prevented, on the
o ther, mojclmum satisfaction of wants would be assured.
(did)

Since industry would not be run on the profit motive

prices can be low and wages high, both of which conditions lead to
greater welfare.
(iv)

A great deal of the administrative and supervisory

machinery of the government, as also the time and money of the legis­
latures would be spared.

Tor the state enterprise would automatically

153

follow the provisions regarding conditions of work, hours of work,
wages, and compensation, etc*
between

This will reduce the chances of conflict

employers and employees*
However, on the basis of the past experiments in this direction

in other countries, it seems reasonable to infer that while economic
gains can be secured through nationalization, there is a great danger
to the liberties of the people*
Monopoly is potentially, and in actuality, an evil.

While in

the case of private monopoly, there is a ray of hope that its evil may
be checked or prevented by governmental Interference, in the case of
government monopoly even that slight ray of hope disappears*

Even in

democratic countries, experience has shown that it often is difficult
to dlsposses a corrupt government that has entrenched itself through
various methods at its disposal*

If the government also controls the

living of a large number of people, it becomes almost unshakeable ex­
cept by a bloody revolution, which is a very costly process*
It has been argued that nationalization is necessary because
private enterprise tends to be monopolistic and oppressive*

This argu­

ment, however, overlooks the fact that big business becomes oppressive
because of the failure of the government or the people to check their
activities.

If proper laws are enacted and rigidly enforced, big busi­

ness can be kept within bounds.

In any case, putting one monopoly in

place of another does not seem to be any solution of the problem*
Furthermore, governmental enterprise need not be and usually
is not efficient*

Lack of conpetition and snug security make people

lethargic and irresponsible*

The war-time efficiency based on a must—

win—at—all— costs attitude cannot be continued when the emergency has

151*

passed.

Of course some industries, on account of their importance

in national defense or because of their character as key industries*
trill have to "be operated "by the state.

But nationalization as a gener­

al policy does not seem to have much to commend it*
Regarding voluntary agreements on the part of private business
as a possible solution, past experience does not offer much ground for
optimism*

Private interests cannot study the problem from a dipassion—

ate and comprehensive point of view.

Unwittingly or otherwise, their

own self-interest prevents openness of mind in considering the needs
of the people as a whole or the requirements of other sectors of the
economy*

In the past such an approach has usually ended in monopoly

agreements*
Thus the only alternative seems to be the creation of a non­
governmental

Economic Advisory Commission. Its duty would be to bring

about conditions of coordination and integration of the different sec­
tors of the economy.

On one hand waste through over-production is

avoided and on the other, maximum welfare is assured through avoiding
any tendency to restrict production to reap monopoly profits*
This commission, however, will work

in an advisory capacity*

From time to time it will publicize economic data indicating the past
and the prospective future trends so that industrialists and business­
men may be warned as to the economic situation.

It will also issue

statements regarding each of the major Industries so that the old mem­
bers as well as the prospective entrants may know where they stand*
But should the commission anticipate a serious si tus.tlon, it would
have the uower to recommend that the state undertake action to ward
off catastrophe.

For instance, it may recommend that registration of

new enterprises in a particular industry be stopped, or that credit

155

be contracted or expanded to discourage or encourage business activity*
This might give the impression that the proposal would involve
too much interference with free enterprise or that industry might be
subjected to too much governmental control.
intent of the proposal.

Thi s, however, is not the

The idea vrould be to coordinate free enter­

prise through a non—governmental agency which would have limited powers.
It Is difficult to say how the plan might actually work.

But It seems

that it would be I s s b subject to abuse than pure governmental control
or pure laissez—faire.

However, in the light of actual experience con­

siderable modifications may be necessary.
The powers of this coamlssion will have to be limited strictly
to recommendation of measures aimed at preventing over-production or
under—pro due tion of vital commodities and forestalling depression.
These purposes would be achieved in two ways.
(a)

Each major industry will have a Council of Action made up

of representatives of all concerns in that industry with a few advisers
of the Commission.

These advisers, in the light of their expert know­

ledge of the economic situation,will help the Council of Action to come
to right decisions in the light of future expectations.

The main

questions to be decided will be how far it would be desirable to Increase
or decrease production in view of the economic trend.
(b)

Should the Commission discover that private measures, for

any reason, have failed to achieve their purposes and there is great
risk of maladjustment leading to a major crisis, it would have the power
to recommend fiscal or monetary measures to prevent the catastrophe.
In some cases a restriction or expansion of credit for a particular
Industry or group of Industries might be all that would be needed.
rare cases more drastic monetary measures may be deemed necessary.

In

156

However, if the Commission is vigilant enough and its plans fairly
effective, there would he very few opportunities for the exercise of
more drastic measures*
lu view of the importance of the task; involved, the personnel
of the Commission will have to he selected with extreme care.

However,

it would he necessary to represent all the major interests from eco­
nomic activity*

^t might he desirable to have 50 per cent representa­

tion each of the experts and the major interests.

Thus if there are

25 members, the composition might he something like the following:

11 Experts
5 Economists
2
1
1
1
1

Statisticians
Political Scientist
Sociologist
Psychologist
Scientist

11 Different Interests
3 Industry
2 Trade
2 Labor
2 Government
2 Agriculture

3 Independents
1 Universities
1 High courts
1 Representative
of President
of the Republic

All these members should be elected by each of these groups,
except the nominees of the government and the President*

The economists

and the statisticians, of course, will form the nucleus of the Commission
and will act as the steering committee.

These economists and statistic­

ians will be elected by the vote of a register of competent economists
and statisticians which may be prepared by the Indian Economic Associa­
tion*

The Commission would be assisted by a Bureau manned by competent

economists selected by the Commission.
It will also be the duty of the Commission to discover the possi­
bilities of new industries, their location and their possible future*
If the Commission is of the opinion that private enterprise either will
not enter such Industries, or will not do it soon enough, it might recom­
mend that the industries be started either as state enterprises or as
Joint enterprises, according to the possibility of attracting private
investors*

157

In whatever form the industries begin, however, the state must
have the d e a r intention of finally converting them into private enter­
prises when their success would encourage private investment, unless
they belong to the category of key industries and public utilities.
This might be achieved through selling the shares to the public when
and as the public vrould be willing to subscribe.

In this way some of

the new ventures may be started in spite of the shyness of private
capital.

But gradually they can be sold out to the public and univer­

sal state industry may be avoided.
Another important duty of the Commission would be to recommend
measures to the State which would keep industrial enterprises within a
certain size.

This, of course, will vary from industry to industry and

from place to place*

It seems highly desirable that gigantic corpora­

tions, whatever their economic efficiency, should not be allowed to
grow.

They constitute a great danger to the state through "pressure—

mechanism" and to the welfare of the people through the exercise of
monopoly power.

It would be well to avoid the mistakes of other coun­

tries where huge trusts
economic system".^

corporations are "running away with our

So it might be necessary for the State to prohibit

horizontal combinations.

Vertical combinations should be permitted

only in so far as they are clearly compatible with maintenance of real
competition* 2S
It might also be anticipated that some industries, for one
reason or another, may not be sufficiently cooperative in the matter

Henry C. Simons, A Positive Program for Laissez-gaire, (Chicago:
The University of Chicago Press, 1 9 3 6 ) » P » ^ 9
28
Ibid., p. 20

158

of prices, wages and other considerations.

Should the Commission

conclude that a particular industry is either keeping wages unusually
low, or prices high, o r i s nan on inefficient lines and efforts to
reform the situation

have failed, it night recommend the starting of

what Eziekel calls wyardstick enterprises11 to serve as competition
and check on such industries.

In many cases the threat of such a

venture might bring about the desired change.

In any case, this

would be a measure of last resort.
Similar commissions may be constituted in each province to
collect data and information, which they will pass on to the Central
Commission, with any recommendations.

These provincial commissions

will be the agencies mainly of the Central Commission and will not
make any direct recommendations either to the provincial or the cen­
tral government, except in matters not directly coming tinder the pur­
view of the Central Economic Commission.

In that case they might ad­

vise their respective governments.
To maintain the Independence of these commissions, the members
need to have a fairly stable tenure and the budget of the Commission
and the Bureau should not be open to vote, except by a special re solu­
tion of the central legislature.
Uiere is one tendency which the Central Board might be expected
to guard against.

Although it is very desirable that production and

consumption should bo well-balanced so as to avoid waste end loss of
human satisfaction, it will have to be remembered that most of the
progress in the world is due to the compulsion of necessity.

Quite a

few processes and products might not have seen the light of day if the
industries concerned

not been faced with the problem of disposal

of their surpluses or other difficulties.

To effect a close balance

159

■between production and consumption might discourage invention, research
and progress to some degree*

So whereas under-production should not

he tolerated, over-production might not be looked at with too much
disfavor.

Of course what exactly would be the extent to which over­

production in a certain sphere might proceed is a very difficult ques­
tion to answer.

But the question regarding the use of over-production

must be posed,as extravagance, excess, a certain foolhardiness is
necessary in real life.

If every man were co%>letely motivated by

rational considerations, and every Society were governed by rational
schemes, the world would not have reached the state of technology
that it has today, and much of the poetry and delight of life would
disappear.

Of course the misery of life,too, would be less.

But the

question is whether man should have his periods of rank growth, extra­
vagant blossoming and then the blight of winter or should he be like
a colorless evergreen shrub which does not bloom with spring and does
not bare with fall?

Of course it is a debatable question, but by and

large it seems that nature does not favor drab mediocrity.

CHAP E H X
LAND POLICY
In a country like India, with its "backward ay stem of f arming
and marketing, it is largely the land use that determines what returns
will accrue to the sfforts of the peasant, who is not very much aided
by scientific skill or up-to-date equipment.

Thus, competent econo­

mists have observed that the first prerequisite of a genuine advance
is a reform of the land system*^"
There are two basic weaknesses of land utilization in India*
(a)

Inefficient and Improper use of land results from small

scattered holdings and traditional methods of agriculture*
(b)

The systems of land tenure put a premium on inefficiency*

So any effective land reform must tackle these problems suc­
cessfully.

Uneconomic Holdings
Apart from the tenure system, the most Important factor af­
fecting the character and returns from farming is the size of holdings
or of cultivation.^

In India the small and scattered holdings which

result from the operation of the law of inheritance is a serious ob­
stacle in the way of inproving the efficiency of farming.
two chief difficulties*
^Sveezy, op, cit., p* 5
Nanavati and Anjaria, op. cit*. p* 93
2
----Nanavati and Anjaria, op* cit., p* 126

There are

l6l

ta )

Hi® holdings Bre too email to provide full-tino employ­

ment for a family, which on the average consists of five to six nemhers#

And. if, as is often the case,

there are no side—opening s for

extra income, many work—hours are wasted*

Of course, if they prac­

tised truck or garden type of farming, it might fully utilize their
work-hour s.

But if most of the peasants did this, it would he diffi­

cult to find sufficient markets for their produce.

Besides, in view

of the lack of cold storage facilities, it is impossible to store such
products, or to transport them over long distances.

Individuals, how­

ever, if they got over custom and tradition in farming practices, could
improve their position.
(b)

But that would not solve the general problem,

The small and scattered holdings, with their low incomes,

do not permit the peasants to give education to their children, or to
help them to move to centers of industrial enployment.
on land continues to increase with every generation.

So the pressure
Nor are the peas­

ants in a position to purchase better seeds and fertilizers which might
increase their yield and income.
them poor.

Thus, their initial poverty keeps

And the poorer they are,

the poorer they remain.

This

difficulty to some extent can be remedied by the provision of easy
loans.

But Judging from the experience in the use of cooperative credit,

it seems doubtful if this would do much good, especially with present
size of holdings and farming practices.
It appears, therefore, that unless the peasant is provided with
an economic sized holding, all other efforts would not be of much avail.
Consolidation of holdings Is a step in this direction.

But

not much hope c a n be placed on this, since some holdings would remain

162

uneconomic even after consolidation, while the consolidated ones may
become uneconomic when the children of the present owners inherit them*
So, consolidation of holdings, unaccompanied by further reform, cannot
be depended upon either to bring about any substantial relief to those
who are in mo f t need, or to preserve the gains beyond a few years.

Tb

achieve more substantial and lasting results a change in the law of
inheritance seems very necessary*
In this connection, there are two possibilities.

The law of

inheritance may be based on either primogeniture or ultimogeniture.
Primogeniture has been more commonly practised, with some Justifica­
tion, perhaps.

When the sons remained at home and took tip the occupa­

tion or profession of the father, the eldest child b y virtue of age and
experience would be the logical person to succeed the father.

But now,

when things have changed and the eldest child may not remain at home,
or may not step into the privileged position of the father, there does
not Bees to be much justification left for such a custom.

In fact, it

has been argued that under present day conditions, the youngest child
should inherit the property of the parent, since the elder would have
time and opportunity to get started on his career during the life of
the parent.

However, during the last hundred years or so, the Injustice

of one child inheriting all the property has been frequently talked about*
Even in a conservative country like England, efforts are being made to
remove the inequities of the system.
"cut off a child without a penny".

Until 1939* a landowner could
Now the courts are authorized to

grant reasonable provision to children who have been omitted in the will*^

**H.
Spiegel, Land Tenure Policies, (Chapel Hill:
Carolina Press, 19hi), p. 2V

University of North

163

In the United States, opposition to such, a system culminated in
Jefferson*s successful fight against primogeniture in Virginia.^

In

India itself, there has always been opposition to primogeniture.

ser—

go dim colony in the Panjab, where the British administrator lnposed the
system on the people, has a bad record of murders of th*» eldest eon
on the part of the younger in order to inherit property.

In his tour

in this colony the writer witnessed a general feeling of opposition
against the law which did not make provision for the other children*
What applies to primogeniture applies with equal force to
ultimogeniture.

Unless the parent has well provided other children

in the form of education and training for some profitable avocation,
and until sufficient openings are available for such dispossessed
children, it seems very unjust that the whole patrimony should pass to
one child.

From the standpoint of economic efficiency, too, it is

unsound because the eldest or the
or desire for farming.

youngest child may

have no interest

"It is to my mind, a weakness of the Aasaetesret

that the eldest son has an unqualified claim to the farm.

If he knows

that he is bound to get the farm of his ancestors, he will not have
the necessary interest to prepare himself properly for the task.*5
This would apply equally to the youngest child*
It seems that the change in inheritance law must be based
on two considerations.

One, that the farm should go

to that child who

is really interested In farming and will make a good Job of it*

Second,

n-----------------------------5

Ibid. , p . 25

P. Borgedal, "The Farm and Farm Family as Social Institutions",
Proceedings of International Conference of Agrlcultural Bconomitfs (193*0*
p. 212

16U

that suitable provision should be made for those children who would
not inherit the farm.

In this connection, Tyrolean Law, adopted in

Austria, should be of some interest.
The law provides for closed inheritance and requires that a
farm cannot be changed in size without permission from the
proper authority of the government.
The owner is required
to appoint one person as the recipient of the entire farm.
...The designated heir is required by the Tyrolean Law to make
payment to the co-heirs within three years of the transfer.
The court, or the one making the award to the other heirs,
decides what is necessary from the estate and the farm in­
come to maintain the f a m and a family of five persons.
The
balance becomes available for payment to the coheirs.^
In 193S, after the Anschluss,
Law of 1933 was applied to Austria.

the German Hereditary Property
This law, among other provisions,

laid down that "rights of other heirs were limited to other capital of
the farm— descendants not receiving the form would get an education
and dowry according to the means of the farm, and would be allowed to
live on the farm if they got in distress without their fault.
A law on the above lines is badly needed in India.

It would

have the effect of compelling children to make earnest efforts to take
up some other calling.

This they now do not do, as they are assured

of some living on the farm.

Such a law, unlike many others aiming at

bringing about revolutionary changes in the mores of a people, could
be enforced, since the state would not recognize inheritance except to
one heir.

But in the immediate future, In the absence of alternative

openings elsewhere. It Is bound to cause much hardship to the dispos­
sessed heirs.

It might be necessary to wait till other sectors of

Buis T. Inman, "Farm Inheritance in Austria1', Journal of Land and Pub­
lic Utility Economics, Aug, 19*+7» p* 290
7Ibid., p. 293

165

economy offer avenues of eng>loyment to large numbers.
Pur thermo re,b u g
of economic
effected.
among heirs

h

a lav will be useful only where

holdings are

size, or will be economic after consolidation has been
In the cs.se of larger holdings, division of the farm land
might be allowed to continue until a certain minimum size

is reached.

This would vary with quality of the soil and geographical

conditions*

After the minimum size is reached, only one heir would be

allowed to inherit the land.

In fact, this would be necessary so as

not to displace immediately too many people from land as they might
find it difficult to find employment elsewhere.
But there would be large numbers of peasants whose holdings,
even after consolidation, would remain uneconomic.

In such cases It

would be necessary to help them to shift to another type of farming.
This might not be very easy, since people do not take to new types of
farming easily, unless they have a spirit of adventure and more than
average level of Intelligence.

Moreover, this shift involves a new

skill which cannot be acquired in a short period of time.
Perhaps a more practical course might be to shift some of these
people to new areas which would be brought under cultivation as the
result of irrigation or land reclamation projects.

If the proceeds

from the sale of their old holdings do not meet the cost of setting
them up in new areas, the state might finance them in the form of a
subsidy or easy long-term loans.

Some of the small holders, of course,

can combine their holdings with the farms vacated by those who shift
to other areas*

166

Systems of Tenure
The present systems of land tenure, in considerable measure
the creation of early British administrators who were largely inter*
ested in easy and effective collection of land revenue, do not meet
the needs of an efficient economy*

They were developed from time to

time according to the needs of the situation, and do not show any
uniform character.
alone.

This variety, however, is not peculiar to India

But the pattern of land tenure is more complex in India than

in many other countries.

This diversity is Illustrated "by the follow­

ing table,
TABLE XVIII
DIFFERENT SYSTEMS OP LAND TENURE IN INDIA
E

B
1. Gov­
ernment
is the
sole pro­
prietor.

Source:
P. 125

1. Govern­
ment.

1. Govern­
ment.

1. Govern­
ment.

1 • Gove m ment.

2. Hyotor
occupant
with a de­
fined title
(not a ten­
ant) as in
MadraB, Bom—
bay & Berar.

2. A land—
2. Land­
lord (Zamin- lord,
ander, Talukrdar, or joint
village bodyregarded a6
a unit),

2. An over­
lord or sup­
erior land­
lord.

3. Dae ac—
tual culti—
vating holder8, indivi—
dual co— shar­
ers, etc.

3• Sub—
proprietor
or Tenure
Holder,

3. Actual
proprietor or
landlord (usu­
ally a village
body.

4. The
Ryot or ac­
tual cul tivator.

4. The ac tual
cul tivating
co— sharers,
etc.

Baden-Powell, Land Revenue and Tenure in British India,

167

Since only 36 per cent of the total area la under the system
of two Interests (Column B), In a large part of the country there
are several intermediaries between the state and the actual

tiller.

This has resulted In many evils which we have discussed previously.
In the last few years, many laws have been enacted to improve the
situation.

But the authorities hold that they have been of the nature
g
of palliatives#
The problem cannot be solved merely by preventing the grosser
abuses of unprotected tenancy, but by going to the root
causes of the growth o f tenancy and making provision to see
that lands do not pass from the hands of genuine cultivators
to "mere rentiers1* on the one hand and ill—equipped sub­
tenants on the other who simply cannot utilize them on eco­
nomic basis.
Thus tenancy legislation is only a palliative
and not a cure.
The agrarian problem is too Intricate to be
solved by tenancy legislation alone.
Whett is needed is an
overhauling of the whole system....”
So. many provincial governments have proposed the abolition
of the system of landlordism and are seriously studying the practical
steps through which it can be effected.

This has aroused the land-

holding interests, and there is a considerable opposition to the pro­
posed plan.

Disinterested economists, too, have criticized the move,

though for different reasons.

At is therefore meet that careful

thought be given to the problem, since such a revolutionary change in
the organization of rural economy would have a profound effect on the
future of Indian peasantry, if not on the whole economy of the country.
~

-

—

Nanavati and Anjarla, op. cit., p. 126
P. K-. Driver, "Abolition of Zamindari", Indian Journal of Agricul­
tural Economic b , Aug. 19^7• PP- H 7 “l ^

5

'

Nanavati and Anjaria, op. cit., p. 12b

168

Before we examine the actual plans, it would "be desirable to
taka note of the general principles involved.

For in the social

sphere, fundamental changes are apt to have more widespread reper­
cussions than are usually visualized.
First of all, any major revolutionary change must be approached
with extreme caution.

Such changes entail so many painful adjustments

and cause so much confusion and general unhappiness that the expected
gains 8houla be carefully weighed against the travail of the new order.
Secondly, while we are apt to see the evils of the present
situation, which is near, in he most lurid light, we are apt to for­
get, or fail to appreciate clearly, the weaknesses of the new order,
which has still the halo of distance around it.
Keeping these two considerations in mind, let us examine the
proposals to liquidate landlordism and establish peasant proprietor­
ship in its place.
Fast experience shows that sub-divlslon of big estates does
not solve the agrarian problem.^®

Also, it indicates, as in England,

that tenant farming need not be inefficient.^

Nevertheless, over­

whelming majority opinion, both inside and outside India, 3eems to be
12
that land should belong to those who work it.
Because it is believed
1(^V. P. Timoshenko, Proceedings International Conference of Agrlcultural
Economics, (193*0, p. 1&2
T. Singh, op. cit., p. f U-3
11Joao Goncalves de Sonza, "Land Problems in Brazil and Their Solution",
F*mr*ly Farm Policy, (Ed.) Ackerman and Harris, (Chicago: University of
Chicago" IPre'ss, 19^+7), P» 282
12
Royal Institute of International Affairs, Agrarian Problems from
Baltics to the Aegean, (London, 1944)* P» 19
3. Sore sen, "The Family Farmer in Denmark", Family Farm Policy, op.
cit., p. 247; FAD, (Washington), Oct. 1, 194-6. p. 22

169

that
tenants generally take less care in preparing the land for
crops, plough it less often, manure it less and use fewer
implements.
They grow less valuable crops, especially avoid­
ing those requiring the sinking of capital in land; they
make little or no effort in improving their fields, they
keep poorer livestock and bestow no care on trees. They
show less keeness in having their children educated, and,
crushed under the superimposad weight of the landlords, they
are not in a position to organize themselves for more profit­
able conduct of their Industry.13
In view of these evils, it is argued that this system must
go.

And it can be done.

For instance, in Ireland since 1870 farm

tenancy has been reduced from 75 per cent to 3 per c e n t . ^
But before the change is effected, it would be necessary to
have a clear conception of what is to be substituted in place of the
old, and whether, all things considered,

the sacrifices and costs would

be Justified in terms of the anticipated results.

The question of the

change in land tenure, therefore, must be related to what fanning
system is desirable in order to build up an efficient economy.
In this connection there are five alternatives, viz., small
Individual farming, collective farming, cooperative farming. Joint
farming, and managerial farming.
Snail Individual Farming
The individual type of farming, also known as family farming,
has great apoeal for those who prize individualism and freedom.

It has

been glorified by poets and rural sociologists as the "way of living".
If it means a fair-sized farm with an abundant scope for the individual's
time and initiative, there is much to recommend it.

1^Trevaskis, The Pan Jab of Today, (Lahore:

But if it means a

Civil & Military Gazette,

1931-2), p. 11

lk
R. Renne, Land Economics, (iTew York:

Harper & Bros., 19^7). p. U63

170

small holding where a family "barely makes both ends meet, it cannot
"be recommended.
While in almost every sphere of production the trend ie to­
wards large-scale to achieve higher productivity per person, it does
not seem very rational to want fanning to stay at the primitive level
of the family size.

15

From the economic point of view, family farms

seem to have little Justification.
If a social engineer, or a statesman, were considering how he
could obtain a given supply of food-stuffs - of about the pre­
sent amount to 5 0 p e r cent higher — from the agricultural
area of G-reat Britain, with the least necessary expenditure
of human energy, and the least necessary contribution of raw
materials (that is, with the least necessary general output);
and at the same time afford the persons concerned with produc­
tion the highest standard of living and the greatest amount
of leisure consistent with maintenance of low prices to con­
sumers.. .It is practically certain that he would not seek
these ends b y strengthening or extending of the family farm
system. °
However, before the issue is decided it would be necessary to
clarify the following points.
(a)

What would be the size of the units into which Zamlndaris

(landlord estates) would be split?
(b)

Will that size be consistent with future trends in farming?

(c)

If not, what are the reasons for that size, and are these

reasons sound?
(d)

Will the objective be realized?

With regard to the point (a) there are two possibilities.
First,

the land may be given to the tenants on the basis of the area

*^A. W. Ashby, "The Family Farm", proceedings International Conference
of Agricultural Economists (193*0*”"P» 19&

Ibid.. (1958). p. 200

171

they ar© culti7 ating at present.
change in ownership,
ing*

In otiier words, whils thero would bs

there would "be no change in the size of the bold­

Diis would, he no solution since India has already a great pre­

ponderance of small— sized, uneconomic holdings; and to create similar
holdings hy distribution of big estates would be no improvement*
fact,

In

such holdings are sure to impede the progress of agriculture*

The second possibility is that land might be allotted in economicsized plots, which in India have been estimated to average between
ten to twelve acres per family.
It would appear that although the economic-sized farm would
be more desirable,

still it would not be consistent with future trends*

The future trend seems to be toward bigger and bigger farming units,
for they are more productive.
So, the justification for small family-si zed farms cannot be
economic.

The justification for perpe turnting the small holdings seems

to be that it conforms to the status quo, and the majority of the people
hate change; it is a "way of living11 which must be maintained even at
the cost of some economic efficiency; the making of economic holdings
would entail a loss of occupation on the part of a large number of
people*
All of these seem to be cogent reasons.

But if people are to

be freed from the clutches of poverty, something further will have to
be done*

The break-up of big estates into small holdings does not

appear to offer any significant improvements in the situation of the
tenant.

Of course, he would not have to pay rent and other exactions

to the landlord.

But he would have to pay rent to the state to meet

the charge to compensate the dispossessed landlords, unless the govern­
ment adopts a policy where the landlord may be dispossessed without

172

compensation.

Furthermore, it is highly doubtful if the heavily in­

debted cultivator would be able to introduce any improvement on the
farm, even when he gets the title to the land and his occupation is
made secure.
Let us see if other systems have something better to offer*
Collective Farming
The Russian experiment in kdlkhozy1^ (collective farm) deserves
careful study Insofar as it is the most outstanding example of a
national effort to increase production.

And if it could be proved

that collective farming has achieved its major objective and has not
been accompanied by other consequences which might nullify the good
results obtained, it would deserve to be seriously considered as a
method of inproving the rural economy of India.

TSiis is particularly

true because the conditions in Russia, before the revolution took place,
were not very dissimilar from those in India today.
A kolkhoz* is an association consisting mostly of peasant farm­
ers whose holdings, equipment, animals, et cetera, have been collectiv­
ized under a charter which defines the organization and operation of
the association.

•

The governing body of the kolkhoz is the general assembly of
its members.

By majority votes it elects its officers, who, headed by

the chairman or manager, direct the work of the kolkhoz and are account­
able to the general assembly.

The assembly also elects an auditing

commission, affirms the budget and production program of the kolkhoz,
and admits or expels new members.

The fanning program, however, is

^ M o s t of the following discussion is based on the excellent article of
Lazar Volin, "The Kolkhoz", Foreign Agriculture, Vol. 11, No s. 11-12

jp- 146-159

Kolkhozy is plural, kolkhoz is singular.

* *

173

subject to regulations and controls according to the plans laid down
"by Moscow.
In the work on the collective fields and with collective livestock, the kolkhoz deals separately with each work—member, and not
with the whole families.

Each peasant family, however, is entitled

to an allotment of a kitchen garden with

pp

area varying from six—

tenths of an acre to two and five— tenths acres, according to the
region.
For the purposes of work management, a kolkhoz is divided
into brigades, each under a foreman.

These brigades are usually

organized for the duration of the crop-rotation, and they cultivate
definite plots of land.

In his daily work, a member of the kolkhoz 1 b

subject to orders and supervision of the management Just as is a
worker in a Soviet factory.

The kolkhoz worker is rewarded for good

work, reprimanded or rmnishad for bad work in the form of fines, loss
of work— hours, or even expulsion.

However, according to the charter,

expulsion must be sanctioned at a general assembly where no less than
two— thirds of the members are present.

18

The state not only directs details of farming, but also has
a first claim on production.

The kolkhoz must hand over to the govern­

ment a certain proportion of specified crops and animal products at
low prices.

The share varies from fifteen to 53 per cent.

19

After

the kolkhoz has met the obligations of the state, including taxes in
kind, payments to M.T.S. (Machine Tractor Station, which renders mech­
anical services to the kolkhoz), and repayment in kind of any seed

18Ibid., p. 154
19Ibid., p. 151

loaned by the government, it then sets aside seed supplies for the
following year end other emergency reserves.
Whatever is left can be freely disposed of by the kolkhoz.
It may sell a part of it in the nearby mar icet and the remainder may be
distributed among its members.

From cash income a kolkhoz must pay

Income tax. Insurance premiums, and various current expenditures and
including those for educational and cultural purposes.

An undivided

surplus of from ten to 20 per cent has also to be set up to cover
necessary capital expendi tureb .20
As regards payment to the members, although at first a low
interest payment on property contributed to the kolkhoz was admissible
in addition to the remuneration for labor, since 1931 only labor is
considered as the basis of distribution of income.

The payments are

based on the work-dayb which are units of work calculated according
to the nature of the work.

Different categories of work are graded

in order of difficulty, skill or importance.

The Income left after

all necessary deductions above described is divided by the total work­
days of all members.

Then the share of each member is determined by

multiplying the value of one work— day with the total he has earned.
For the manager a supplementary monthly cash allowance is made in pro­
portion to the increase in the total Income of the kolkhoz.
Now, in evaluating the success of collective farming, it would
be necessary to remember that some of the defects and weahaesaea of
the program as found in Russia are the necessary accompaniment of a
20

Ibid.,

p.

151

175

certain ideology and politlcrj. exigency.

Under different situations,

collectives may have a different story to tell.

On the other hand,

some of the achievements in Russia, which had vast areas of virgin
land and low pressure of population, might "be inconceivable in a
country like India, where, on account of tremendous pressures of popu­
lation, complete mechanization of agriculture (the most important
element in the Russian experiment) is unthinkable.
With these considerations in mind, let us examine the collect­
ives as a possible wqy of improving the economy of India.

But first,

it i8 necessary to consider the criticism usually levelled against
kolkhozy.
(a)

It is alleged that while in terms of the Charter the

general assembly manages the affairs of the kolkhoz within the general
directives of the state, in actuality the government and party offi­
cials appoint, dismiss, and transfer officers and Influence decisions.
(b)

It is asserted that the state takes away such a large

share of the produce or the income that there has been little or no
improvement in the standard of living of the peasants.
(c)

It is argued that detailed regulations and plans from

Moscow leave little initiative and freedom to the Individual kolkhoz.
These objections, while they point to the dangers of dicta­
torial economy, do not prove that collective farming cannot be carried
out under democratic procedure.

However, there are other objections

inherent in the collective enterprise.
(d)

Peasants have moved away from the collective system every

time an opportunity has offered itself.

When individual plots were

granted, it was found necessary to fix a minimum number of work-hours
on the collectives for every man; otherwise, people spent most of their

176
time working on the individual plots.
(e)

The calculation of work-hours on the basis of type of

work, and the conditions of work, is very difficult for achieving
fairn6 8 6 and equity.

Actually, it offers tesptetlon for padding and

corruption.
(^)

It has been discovered that collective work is slow and

less efficient.

Studies made by Siberian Institute of Grain Farming

and Voronezh Research Institute show that work output increased con­
siderably when work was allotted on an individual basis.21
When incentives for better production are used to make indi­
viduals work harder, it is likely to lead to injustice, since in agri­
culture productivity depends on weather and other conditions, and not
exclusively on the efforts of man.
(g)

The work of administration and supervision becomes eo

cumbersome and difficult that either it might become tyrannical or
too lex.
Some of these difficulties can be removed through proper pro­
visions and democratic processes.

But it seems that collective farm­

ing should meet two crucial tests before it can be accepted as a nor­
mal way of life.
(1)
cient

It must be proven that collective farming is more effi­
individual farming, because the most important Justification

for change lies there.

Experience so far has been inconclusive.

In

many cases the efficiency in production has been due more to mechaniza­
tion, better seeds, better fertilizers, which could achieve the same
21
V. Chuvikov, quoted by Volin, Ibid., p. 152

177

results under a different system.

On the other hand, it has felled

to draw the best In wan* and individual incentives have been felt to
be necessary to spur effort.

In fact, it seems questionable to impose

a system o f communal organization, which society has outgrown.
India, where for many centuries now.

In

the peasant has carried on indi­

vidual farming, it would not be possible to enforce communal organize—
tion without some compulsion.

While compulsion may vork under dicta­

torial regimes* it is very doubtful that it could operate under demo­
cratic government, particularly when It is a question of dealing with
about 87 per cent of the total population.
(2)

Tiien it has to be decided whether a system of cumbersome

calculations, difficult and onerous supervision* and unpleasant tasks
of Judging and punishing the achievements of individuals is conducive
to Mabundant living" which we cherish as the ideal life.

The question

to be answered is how far individual initiative and independence should
be sacrificed for the sake of economic efficiency.

And when its eco­

nomic efficiency is doubtful, is it desirable to subject society to a
new type of organization and cause all the discomfort and pain of ad­
justment?
However, every system can be modified to some extent.

If the

gains of collective farming could be obtained without the evils of the
system* the experiment might be worthwhile trying.

But it seems that

the democratic process is also subject to abuse, and often the tyranny
of the democratic majority is as oppressive as that of dictatorship.
Therefore, any tendency to ward s restriction of the private sphere and
extension of collective action and control must be looked at with sus­
picion.

Unless the collective enterprise offers clear and distinct

17S

advantages, indivldnal enterprise seems to "be a more desirable ideal*
In any case, the actual working of collectives under democratic
methods on an experimental basis will have to be observed before
collectives can be considered as a coun try—wide solution of the agraxian problem.
Cooperative Tanning
In the history of mankind, cooperative enterprise has time
and again fired the imagination of reformers and men of good will*
The success of cooperatives in limited fields has frequently supplied
the inspiration for similar operations on a larger and more extensive
scale.

Thus we have the examples of the cooperative enterprises of

Bobert Owen's New Harmony, the Rochdale Pioneers, the Oneida Colony
(New fork), Amana Community (Iowa), the Doukhobore (Canada), the EJido
(Mexico), and Kvutza (Palestine), to name the more important ones*

22

The apparent success of some of these ventures has inspired
many Indians to pin their hopes on cooperative farming as a means of
improving India *s rural economy.

The authors of the Bombay Plan^^ make

cooperative farming an integral part of their programs to wipe out pov­
erty and raise the standard of living of the rural people*
It seems, however, that the protagonists of cooperative farm­
ing have been influenced largely by sentimental appeals.

They have

failed to bring the spirit of scientific and dispassionate inquiry to
bear on the problem of cooperative farming.

After noting the success

of Buch enterprises in small communities, if it was a success, they
Joseph W. Eaton, Exploring Tomorrow's Agriculture. (New fork:
Brothers, 19^3)
23
P* Thakurdas and others, o-p. clt.

Haiper

179

have tried, to envisage a cooperative economy for a country as big as
India, with, about UOO million people of diverse races, religions,
cultures and time-honored institutions which cannot be changed swiftly.
In fact, most of the cooperative ventures where any degree of
success was achieved were carried out by closely knit small communi­
ties which started their career usually in new regions.
old order and no old institutions to be scrapped.
or less a clean slate.

There .was no

They began with more

In their efforts they were supported and moti—

vated by some type of religious or spiritual zeal

pji

for an ideal type

or mode of living, for which they were willing to make every sacrifice
and to live p o o r l y . ^5

yor eianple, "the pioneers one meets in Pales­

tine have a fanatical belief in their mission as torch—bearers of a
Jewish homeland built on the basis of productive work.

Theirs is an

ideology which glorifies labor and considers it an essential element
in good life."

26

The same is more or less true of other ventures.

Religious or social persecution and lofty idealism were the chief
characteristics of these colonies.
Many of these ventures broke up at the death of their found­
ers when no -unifying and motivating spirit was left to coordinate and
bind together the individualism of the followers.

Others failed be­

cause of special circumstances such as poor land. Insufficient capital,
natural calamities, and social opposition.

Those which have weathered

the storms find themselves weak, and many are disintegrating.

T3ie

£17------------------------------H. W. Spiegel, Land Tenure Policies, op. clt.. p. 39

2^Brl.1 Narain. Economic Structure of Free India, op. cit., p. 5
26
''
V. C. Lowdermilk, Palestine. Land of Promise. (Few York: Harper &
Bros., 1944), p. 130

180

The Amana Community and the Doukhobors have become quasi—cooperative.
Hutterites alone of the historic communities do not show any signs
of disorganization*2?
On the basis of all these ventures* past and present, success9*
ful and unsuccessful, there is little hope th*=t India could have a
country—wide successful system of cooperative farming, since the most
important characteristics, viz*, the religious zeal and lofty ideal­
ism would be lacking*

^t is difficult to see how these could be in­

stilled among large masses of farmers*
Oie EJido is another experiment in cooperative or communal
farming2® which may be considered in this connection.
B y the land reforms Initiated in Mexico since 1915* an attempt
has been made to break up the big estates and give the land to village
conxcunities or ejido, in whom vests the ownership of land and water*
According to the provisions of the law, the ejido is a selfgoverning community which chooses its own officials through vote of
the general assembly.

Its chief authority is a commissariat of three

members elected every two years*
executive functions.

They perform the administrative and

To keep a check on this committee, and to pre­

vent any abuses or irregularities, a vigilance committee of three pensons i 8 similarly elected for two years*

29

John W. Fitxgerald, "Cooperative Farming*1, (unpublished paper), p. 11
28
The description of Ejido is mainly based on "The Mexican Agricultural
Credit System", by Julia L* Wooster, Foreign Agriculture, Vol* 7, Wo. 2,
Feb., 19*4-3, p. 28f
29 Ibid.

1S1

USie actual working of the ejido, particularly in the matter of
social and economic affairs, however, is largely directed "by the minib—
try of agriculture and the national Bank of Ejidal credit through
aS®n ^8 who, in fact, act as coordinators, and frequently as directors
of the Ejl&al economy*
These agents study each ejido and recommend plans which will
enable the community to adopt and develop better farming methods
practices*

When the plan is approved by the general assembly, it be­

comes the determining pattern for all activities of the ejido*

Through

the Bank it has been possible to provide credit at low rates while the
ministry of agriculture supplies seeds, plants, and technical informa­
tion.

The ministry also provides guidance and aid in the matter of edu­

cation, hygiene, et cetera.
The great majority of the ejido are worked by the method of
allotting an individual a parcel of land for family use and leaving
him to operate it for whatever profit he can make.

But often the allot

sent system has proved insufficient to maintain a rural family, in which
case the ejido is farmed collectively, the most outstanding exaaple of
this being the Laguna region.
As is clear from the above, it is not an experiment in whole­
sale cooperative farming.

With regard to the success of ejidos, one

observer remarks:
The new agrarian communities thus set up as ejidos have made
a diverse record of success and failure... .Apparently the
factors which determine success or failure are three: first,
able and honest leadership in the community; second, a money
crop such as magney, cotton, sugar cane, or henequan which
can pay the cost of community development; and third, land
which is not only productive for the kind of crops grown,
but is also so arranged
it is all reasonably accessible
from the village centre."*
- P r e s t o n 3. James, Latin America, (New York;

19U2), P . 6bh

Lothrop, Lee and Shepard,

182

Another observer( while warning that it is yet too early to
pass Judgment on the success of the ejido, tentatively concludes that
according

available statistics the average production per acre ^>tiJ

the average income of the communal fanner appear to be much lower than
those of private farmers.^
On the basis of the above testimony, it is difficult to recom­
mend tills system as a way of increasing the efficiency and productivity
of the Indian farmer, particularly when we cannot be too optimistic
about the right leadership,

"There does not seem to be the right at­

mosphere for it in our village*...Unless we remove all the causes of
the failure of cooperation in other fields which have been operating
during the last UO years it would be rash to predict success for cooper­
ative farming."'^
J o i n t —

Farming

Mr. Tarlok Singh's plan of joint—farming-^ as a practical
solution of India's poverty merits a careful study.

With impeccable

logic he makes a very strong case for joint-farming, which alone, in
his judgment, offers a feasible solution to the problems of the agrar­
ian economy of India*
Briefly his plan is that cultivatable land in the village would
be pooled together and then divided into economic— sized units, the

^Charles H. Barber, "Mexican Land Problem", Foreign A^rlculture.
Vol. Ill, w0. 3. March, 1939. p.119
32

P. N. Driver, op* cit,, p. 119

33

T. Singh, Poverty and Social Change, A Study in Economic Organization
of Indian Rural Society, (Calcutta:Longmans, Green, 19^5)

183

ons^plougii unit (a unit of land, that may "be cultivated "by a peasan t ,
aided by his family, according to the current techniques).

The exact

size of the unit, of course, will vary according to the nature of tha
soil and other circumstances.

Each family will get a unit by drawing

lots so as to obviate any favoritism.

If there are more families

than plough units, some of them would not get the land.

Work for them

would have to be provided on garden, and vegetable farming areas, where
a smaller work—unit of land would be required.
land would be kept for this purpose.

In every village some

For others, work would be found

in the village industries, which would be decentralised for this pur­
pose, and also to make use of the vacant hours of the peasants.
The land would be individually cultivated, but tbs income
would be pooled.

This total income would be divided into two parts:

the income from work, and the income due to ownership.

The division

may be in kind or in cash, 30 per cent for work and 30 per cent for
ownership,

the latter going to a common fund.

Out of this fund the

whole village farm would pay its lend revenue, carry out such common
investments as may be necessary, and meet essential charges.

This

would provide a basis for putting more capital into farming.

The bal­

ance will be distributed as ownership dividend according to the value
of the area contributed by each family to the village farm as a w h o l e . ^
The method by which the above aim is to be achieved would be
voluntary.

But wif two— thirds of the owners of a peasant village hold­

ing three-fourths of the area agree upon joint management, the rest
must fall in,M35

Under the new system, ownership would not imply perma­

nent physical possession over, or association with, a specific piece
Tii
Ibid., p. 58
35
Ibid., p. 12

"

ish

of land; nor would It Imply the right to rent that piece to a tenant*
® ie total village econony would "be controlled "by an organize—
tion w hich would include not only the peasantst "but every resident in
tne village, whother he belongs to the group of peasants or artisans
or agricultural laborers*
body*

The decisions would be taken by the entire

A n executive committee appointed to carry out day-to-day tasks

would be elected by the village community as a w h o l e . ^
Several advantages are claimed for this plan.
(a)

It retains the principle of eoual inheritance and owner­

ship which is so dear to the heart of the peasant.

At the same time

it ensures efficient farming through economic holding and retaining
motive power of private enterprise*

By way of the common fund it

ensures schemes for improvements of f a r m and farming practices through
ready supply of capital*
(b)

Through ruralization of Industry, the dangers and evils

of urbanization a n d large-scale industrialization would be avoided.
(c)

There would be no revolutionary changes which usually in­

volve so much oppression and misery.
(d)

B y removing class and caste barriers,

the plan would

ensure equality and efficiency*
The plan, however, is open to certain serious objections.
(a)

Although Tarlock; Singh apparently bases his plan on vol

tary acceptance and democratic method, yet he appears to slip into an
over-all, more or less dictatorial,

type of planning when he says that

before the village passes into Joint-management, its social
economy will be carefully surveyed by fully trained officials
with the assistance of the village community... thus we shall
have to know in detail, for each family (1) its composition,

-----------------------------

165

(2) the fields owned and cultivated by it, (3) its supple­
mentary sources of Income, (*+) its agricultural equipment in
the shape of implements and cattle, (5) its indebtedness,
both, secured and unsecured and (6) particulars concerning
the health and education of each of its members. .. .As Joint
management implies planned development of every aspect of
life, we should set about prepaxing an all— embracing budget
which, oh adoption by the village and acceptance by the
state, will become its immediate programme of action.
(italics added).37
How, if nothing else were the matter with this planned develop­
ment of every aspect of life, and if every family could be subject to
an all-embracing budget prepared for it by the community and the state,
where would the necessary army of trained people come from?
time would it take to train such an army in India?
would it take to complete the survey?

How much

And how many years

It seems that these practical

issues have not received careful consideration.
(b)

It appears that Tarlok Singh has overlooked the fact

that his solution assumes a stationary state and no growth of popula­
tion.

It may be possible

to provide an economic holding to a family

Just now; but what will happen when the
have their own families?

Tet

the peasant marry and

To whom will the holding go?

will exist for those who are left out?
have escaped notice.

sons of

What provision

These considerations seem to

they are very serious

in view of the tremen­

dous growth of population in India,
(c)

The attempt to make a village a self-sufficient unit is

not only contrary to the historical trend, but also seeks to do away
with the gains of specialization.

As we have seen in the last chapter,

this return to a primitive economy can only be an Inefficient and costly
process,
(d)

The problem of the poverty of the peasant is not only the

problem of low production, but also of the failure of crops due to
37Ibld., p. 82

186

natural calamitlea as al b o of low income due to tmremunerative prices*
For these no remedy has "been suggested or proposed*
(e)

The greatest difficulty of the plan would be in the matte

of village organization* where all classes and castes would sit together
to draw plans for the economy of the village*

While such a plan may be

highly desirable* it seems that it is expecting too much from a customridden village, at least for a considerable period of time.

One who

has watched the vorking of newly organized Panchayats (Village Councils)
and cooperative credit societies can not be very optimistic about
village assemblies of the type proposed*
Managerial Farming
Under this system, all the land of a village may be rented at
the prevailing rate of rent* to a manager who would be an expert in farm
management.

Every landholder, on the basis of his acreage* would re­

ceive an income in the form of rent.

The manager would operate the

whole land according to the be st—known principles of farming, employ­
ing as much labor as he needs.

To safeguard the interests of the wage-

saraer* certain regulations regarding minimum wages, and other work con­
ditions* can be laid down.

After all the necessary payments have been

made, the surplus will be the reward of the manager, except that a cer­
tain percentage will go to a reserve fund to act as insurance in a bad
year.
This Dlan would ensure maximum efficiency on the part of the
manager,

since the more efficient he is* the greater would be his

profit.

It would also guarantee efficiency on the part of the worker

whose wages, within certain limits, would depend on individual industry.

187

It w u l d al so insure & certain income to ©very 1 andho lder whose title
to land w o u l d remain unimpaired.
Insofar as the making of decisions would he entrusted to a
manager, well—versed in farm management and social leadership, and
would not lie in the hands of a general assembly of peasants not so
well-informed,

the managerial farming offers greater scope for effici­

ency than any other system.

Since the size of the enterprise can be

so limited as not to become unmanageable and inefficient, this system
offers distinct advantages.

Furthermore, it offers greater and more

immediate chances for the improvement of the system of farming than
can be envisaged under any other system except collectives.
This type of farming has not found much favor with rural
sociologists, social reformers, or even agricultural economists.
a large extent,

To

this seems to be due to a kind of moral revulsion at

anything that smacks of industry.

Of course, from moral and psycho­

logical considerations, it would not be desirable to turn an indepen­
dent peasant into a wage earner.

But it seems that, unless a more

revolutionary change in village organization is accepted,

the majority

of holdings, even after consolidation, would be so small that the peas­
ant as an entrepreneur would be in a worse position than a wage earner.
As to the introduction of this plan, it might not be very diffi­
cult in the Zamindari areas.

The landlord, with the alternative of

losing his estate, could be properly educated or trained to become an
efficient manager.
by the landlord,

Since the tenants are already used to being directed

the change would not present serious difficulties.

In the Hyotwari areas there
tance.

For

such

areas some

is

bound to be considerable resis­

compromise

plan may have to be formulated.

189

Owners having farms greater than a certain minimum size might "be given
the option to rent the land to the manager.
lngs, they might "be compelled to do so*

In case of smaller hol&~

To conquer opposition,

the

change might "be declared to he temporary, say for seven years, after
which if the peasants were dissatisfied,

they might he permitted to

withdraw.
If this plan were accepted it would mean that the organization
of agriculture would acquire the characteristics of the industrial
economy w i t h all its advan tiigo - end c Isadvantages.
would he greater efficiency in production.

The chief advantage

The chief disadvantage

would he that the peasant proprietor would become a wage— earner end
may not have assured employment.
all.

Some may not find a n y employment at

What the actual extent of displacement might he would depend upon

the total numbers In the village and the type of agriculture that would
he followed.

But there is little reason to suppose that it would he

very large unless large-scale mechanization occured too rapidly.

To

prevent this the government could control the speed of mechanization
by controls on the sales and purchases of agricultural machinery.

Some

of the displaced persons could he assisted to migrate to industrial
areas.
The more serious problem would he the change In the status of
the peasant proprietor.

While this seems to pose a difficult question

in the abstract. In practical life It does not appear to be so serious,
provided the individual has some choice in the type of work.

If work­

ers In industry and state services work under direction without great
lossts human, freedom or happiness,

there does not seem to he a strong

reason why ■oeasants might not do the same.

In the more advanced coun­

tries like the United States and the United Kingdom,

the majority of

190

people work for wages
cent to the growth
dom.

In any case,

and apparently get along well wi thout imo air—

of their personalities or

enjoyment ofreal free­

the question needs to he studied scientifically to

bring out the advantages and disadvantages cf the system*

Choice for India
It seems, then,

that while

there can be no doubt that the

present land system needs reform, it is not at all clear as to what
should t i t s
strong as

v-ell

place.

The various proposed land programs have their

as weak points.

None of these plans seem to offer &

clear-cut solution

of the problem in India* Under such a situation

It would be unwise

to adopt any plan for the

out giving it a careful trial.

country as awhole with­

It is no use substituting one system

for another unlees there is some assurance that the new order would
realize our hopes*
So it would seem desirable tz select representative areas
where these different plans might be tested with regard to their
practical working.

Vfhile it would be necessary to supervise these

experiments very carefully, it oust be remembered that a plan should
not be tried under ideal conditions*
experiment would be lost.

For then the very purpose of the

The social experiment, if it is to have any

value, must prove Its success in practical situations with all their
limitstions and imperfections.

The tendency in the past has been to

select the best conditions for demonstration purposes.

Since the same

results naturally could not be obtained under ordinary conditions,

the

demonstration failed to convince the people, and no headway could be
made.

ThuE it le necessary to prove

that a plan will work under all

the imperfections that one meets in the villege*

191

Furthermore, In order to get reliable restate, the experiments
must "be extended over a number of" jeers.

What might be possible in a

couple of years, with the enthusiasm and Interest in a new system,
might not be possible when some of the glamour of the new order will
have disappeared with the passage of a few years.

If future disap­

pointment and loss Is to be avoided, we must build our order on com­
paratively sure footing.

CHAPTER XI

PIKANCE POLICIES
In the agricultural enterprise the greetest efficiency- of the
operator may not ensure adequat6 Income* end. the peasant may find him­
self in difficulties despite his honest and strenuous labor.

A natural

calamity may ruin his crop, or low prices for hie produce may completely
wipe off his income.
While it is true that a majority of the peasants in India prac­
tice more or less subsistence farming and do not have any substantial
surpluses for sale, yet it is also true that even the poorest farmer
has to pay taxes end meet some of the social and family obligations in
cash.

They have to sell some of their crop, even if they have to stint

in the matter of necessities.

In a bed year, they even have to purchase

food.
The income of the peasant,
tor in his well-being.*'

therefore, is a most important fac­

And over this income he has little control.

While it m a y be argued that a peasant, like any other entrepreneur must
bear the risks attendant on his enterprise, yet the situation is differ­
ent in his esse.

In other enterprises the entrepreneur has the power

to expand and contract production in accordance with changed demand as
reflected through the prices offered*

But the peasant, on account of

the following reasons, is not in a position to do so.
(a)

A very high percentage of a farmer*e costs are fixed so

I\AO, Proposals for World 3Tood, Board, etc., (Washington. Oct. 1* i QkA >
p. 22 ------------------------- “

192

193

that the total costs are not much reduced by limiting production.
Moreover,

the reduction by any one fanner would not have any notice-

able effect on prices*

In fact, in the face of falling prices he

may attempt to meet hie fixed costs by producing more, not less.^
(h)

Agricultural adjustment involves a considerable time

leg so that production cannot be adjusted to price changes immedi­
ately*

Farm production processes are continuous and controlled mainly

by seasonal growth of crops and natural life cycle of animals*^

In

fact, as the result of time lag, whatever efforts are made to adjust
production to prices often aggravate the situation*

time.

(c)

Agricultural production runs close to capacity all the

(d)

Agriculture is carried on by such a large number of enter­

b

prises spread all over the country that they cannot take concerted ac—
5
tion to adjust production to market conditions*
But if the peasant were actually in a position to contract
production and thus artificielly raise his prices, it would be the
cause of great social concern and anxiety*^

For, irrespective of what

the people may be able to offer for the products of the peasant, society
^Geoffrey S. Shepherd, Marketing Farm Products, (Ames: The Collegiate
Press, 19*4-6), p. 32
^United States Senate Committee on Agriculture and Forestry, Long-Range
Agricultural Policy and Program, (Washington, United States Government
Printing Office, 19*±8), p. 15
^Geoffrey S. Shepherd, Agricultural Price Analysis. (Ames:
Iowa State
College Press, 19*4-7), p.
_5

5 Ibid., p p . 2*4-?5
^Post-War Agricultural Policy, (Committee on Post-War Agricultural Policy
of Association of Land-Grant Colleges and Uhiversities, 191^ ) * P» 6;
Theodore w* Schultz, Agriculture in an Unstable Economy. (Hew York:
McGraw-Hill, 19*+5), p. 137

191*

cannot do without what the peasant produces.

Any contraction of pro—

duction on his part will jeopardize social well-being.
other enterprisers,
number.

In the case of

restricting production usually affects a small

Even where it affects many people, the hardship may not be so

great because society c a n do without their products without serious
loss of well-being.

But the shortage of food and clothing would be a

serious calamity.
Thus society has a stake in farming.

For its own well-being

it should ensure those conditions where farming is most efficient so
that people can be well provided with physical necessities.

But if

fanning is not adequately remunerative, it cannot be efficient.

Un­

less the peasant knows the returns he is likely to obtain, he cannot
afford to spend money in trying to increase his output leet the value
of the increased production should be less than the expenditure that
has to be incurred for obtaining lt»^

So a national policy to make

agriculture a paying enterprise is a social necessity.
Income Policy
The income of the peasant depends upon the following factors!
(a)

Prices:

The higher the price for agricul tural products,

the greater tends to be the income of the farmer.

And prices depend

upon the demand, vAich in its turn depends upon the prosperity of the
consumers

generally.

So the greater the prosperity of non-agricul­

tural sector of the economy,

the higher the income of the peasants is

likely to be.
(b)

Productivity:

ever, is more complex.

The relation of low yield and income how­

In the case of commodities with a unit elasti-

Memorandum on Agricological Development in India.
Council of Agricultural Be search, I 9 M+)

(Delhi:

Imperial

195
city of demand, a low yield Is accompanied "by higher prices and total
receipts therefore remain more or less at the same level*8

However,

while this is true for the economy as a whole, the fortunes of indi­
vidual peasants may he affected considerably by a low yield.9

Simi-

larly, while one region may have a short crop, other regions may have
a bumper harvest and therefore low yields in a particular area do not
benefit the peasants in the form of

gh prices which might be exp ec—

ted if there was a general short crop.10 Besides,with high fixed costs,
lower prices encourage greater crops with the result that prices are
brought down more and the income of the peasant is further reduced.
Since the Instability of farm income is caused by unstable pro­

duction and unstable prices,

two lines of approach have been suggested

to ensure fair returns to the peasant.
(a)

Stability of crop yield:

This may be achieved through

"drought—resistant crops, dry-land farming, disease— resistant plants,
and animals, and modern insecticides. . ..n'^1

For this purpose, research

and education as well as propaganda through extension service would be
needed.
But that would not be enough.

All the ingenuity of the peasant

and the scientist may be foiled by hail, storm, heavy rain, floods,
epidemics, etc.

For such exigencies, particularly in the regions most

susceptible to it, some type of Crop Insurance Program will need to
be introduced.

Since it is difficult to distinguish the variations in

yield caused by natural hazards from those caused by bad farming, the
development of crop insurance would not be an easy matter.
g
Schultz., op. cit*, p.
£^hepherd, Marketing Farm Products, op. cit., p. 35
Schultz., op. cit., p. 213
Ibid., p. 215
12
Schultz., Ibid., p. 217

12

However,

196

It might be possible to classify areas, on the basis of the frequency
s-ad Intensity of the risk, and Individual peasants on the basis of
their efficiency, into categories and the insurance premium could be
varied accordingly.

The compensation could be a certain multiple of

the premium depending upon whether it was total failure, 75 per cent
failure, 50 per cent failure or 25 per cent failure,
In India, owing to lack of education about Insurance

the

people generally, it would be necessary to have compulsory insurance,
at least in the early stages.

And since no private agency might under­

take this new venture, there would be the need of state insurance.
The premiums could be collected with the land revenue and no extra
agency need be created.

It may not be possible to develop a completely

perfect system "but the choice should not be between a crop— insurance
program that attains the perfect goal or no crop-insurance program
whatever.
(b)

Remunerative Prices!

Since an insurance program will

affect only a small number who would be the victims of natural haz­
ards, and since it would be purely a compensatory measure,
plank of reform must be In the matter of prices,

the main

The farmer needs

to be assured adequate re turns to make farming a satisfactory way of
living.

This may be achieved In various ways,
(i)

Borough satisfactory employment conditions, th

chasing power of the non—agricul tural sector of the economy must be
maintained at a level high enough to create adequate demand for the
peasants' produce*
scope of this study.

13Ibld. . p. 218

How this actually would be achieved Is beyond the
But authorities are fairly agreed that through

197

fiseal—nonetary measures such as issue and retirement of money, spend­
ing as well as raising of money through public expenditure, taxation
and borrowing, it is possible to maintain purchasing power high enough
to ensure effective demand for the products of agriculture
Insofar as such an objective is not immediately achieved or
possible, it might be necessary to a,dopt other measures such as subsi­
dies.

The latter would not only support the income of the peasants,

but also would assure that the peasants do not contract production of
food, etc. which the non—agricultural sector economy needs irrespec­
tive of whether they have the requisite purchasing power or not.

Be­

sides, such a policy by keeping the farmers solvent is a necessary
condition to provide a spur to industry through increased purchasing
power.
(ii)

Another method of ensuring adequate returns to t

peasant is through pegging prices at a remunerative level.

This might

be achieved through Support Prices or by Forward Prices.
Support Prices:

The parity-price plan under the Agricultural

Adjustment Act in the United States is a very good example of govern­
ment support prices.

According to this the object was to assure the

farmer of fair prices for certain agricultural commodities.

The period

was taken as a base period as this was a normal period of
profits for farmers.

The Secretary of Agriculture was authorized to

make payments to farmers which together with the receipts from the
sale of their crops would bring them a return approximately equal to
the parity price on their normal production. 15J
Schultz, op. cit., pp. 219—220; Eansen, Economic Policy and Pull
Employment; Beveridge, Full Employment in a Free Society; Meade and
Hitch, Economic Analysis and Policies#
'

- -

-

Farmers in a Changing world, (VJhshington, USEA, 19*+0), P- 319

198

These support prices have "been subjected to much adverse criti­
cism.

While some of the criticism relates to the choice of the base

year and other technical matters with which we need not be concerned,
much of it rests on general principles.
It is argued that since calculations of parity prices or sup­
port prices are based on a past period, of necessity, they would be out
of step with current supply and demand conditions.

Therefore, such

prices are likely to clog both internal and external trade whenever the
prices that would clear the market are less than the support prices. X 6
Secondly, support prices require a program of storage and govern­
ment purchases of the commodity in sufficient amount to keep the market
price at the support level.

But since such stocks will have to be dis­

posed of at a later stage, this would greatly disrupt trade.

Moreover,

storage would involve huge monetary commitments*^?
Thirdly, as Johnson argues, such a program Interferes with
proper allocation of natural resources and thus leads to inefficiencies.^
Fourthly, the policy involves a loss of total consumer satisfac­
tion since at the higher prices many consumers are prevented from making
purchases which they would have made at lower prices.
Forward Prices:

In view of the difficulties of support prices,

an alternative suggested is a system of forward prices.

In the words

of Professor Schultz, it would have distinct advantages:
^^Schultz, op. clt., p* 269
17Ibid.. p. 270
1SD. Gale Johnson, Forward Prices for Agriculture, (Chicago:
of Chicago Press, 1947)", p. 115I 130

University

199

Such forward prices should present each farmer, as he proceeds
with his production operations, with a schedule of relative
prices for at least one production period ahead, considerably
more dependable than heretofore. As this is accomplished, it
would increase the ability of farmers to allocate and use the
resources at their disposal much more efficiently.
It would
also reduce considerably the price uncertainty burdening
American farmers*19
In achieving the above purposet forward prices do not supplant
the price system*but rather represent a technique for mairiwg the price
system work more effectively. 21
'The fundamental principle to guide the formulation of forward
prices is that price changes which keep production in line with demand
should be maximized and price changes that do not contribute to produc­
tion adjustments but contribute to price uncertainty in farming s ho raid
be minimized.^

The most distinctive feature of a forward—price sys­

tem would be that instead of ignorant individuals making estimates of
future prices,

this would be done by a group of experts who would be

In a position to make more correct estimates and thus steer the economy
?3
into a better allocation of resources. ^
This program of forward prices, however, seems to be fraught
with the following difficulties which need careful consideration.
First, there is considerable possibility that the production
of a crop may be so much stimulated by a high forward price, that it
leads to over-production.

Of course the aim of putting a high price

15---- ------------------------Farmers in a Changing World, op. -it. p. 320
20
Op. C i t . s p. 2^1
21 -----Johnson, op. cit., p. 132
22
Schultz, op. cit., p. 265
23
----Johnson, op. cit., p. 132
'

'

200

on a commodity would be to encourage its cultivation, but it seems
that its production will be likely to overshoot the desired mark.
While such a situation is anticipated by Johnson, who argues
that storage provision will be a necessary part of the forward prices
program,

the difficulties and cost of such a provision seem to have

been underestimated.

The presence of the idle stocks and repercuss­

ions on demand as the result of a high price introduce an element of
uncertainty so that the expectations of price—makers may not be realized.
Secondly, agricultural production is not exclusively dependent
upon the efforts of man.

The working of natural causes is beyond the

control of man or the economic ministry.

The best effort to guarantee

forward prices may fail because nature may refuse to cooperate with the
experts.
Thirdly, since different regions produce different crops, the
fortunes of a particular region will depend upon how high the price of
a certain commodity is fixed.

This would lead to the danger of pressure

groups influencing the price—making agency in their favor and thus open­
ing the w a y to much abuse and corruption.
Fourthly,

such a program ignores the repercussions of the inter­

national situation on the price structure of the economy of a country.
'To country can have a completely isolated econony which will not be up­
set by happenings elsewhere.
So whatever the theoretical advantages of forward prices, as a
practical

measure

for stabilizing agricul tural income, it does not seem

to offer m u c h hope.
For if a forward price is nothing but an anticipated future
price, it does not serve any purpose except to lower a high price through

201

increased production.

On the other hand, if forward prices are arbi­

trarily bolstered to stabilize farm incomes,

they may fail in this

purpose because high cost of agricultural products may bring about
hi^ier prices of manufactured articles through increased coat of pro­
duction*

What the peasant gains in the form of higher income may be

neutralized by the higher prices of things he buys.

Stabilization of

income would not serve much purpose unless costs also are stabilized*
As to the desirability of increasing the Income of the farmer by price
plais, even Johnson admits that this is questionable if the price
system is adequate or is a proper means of achieving that objective*Compensatory Payments;

The real problem of agriculture is

that it is a chronically depressed industry and therefore does not
offer returns to the peasants corresponding to what entrepreneurs get
in other sectors of the national

e

c

o

n

o

m

y

.

while this seems unjust,

to attempt to equalize returns in agriculture and industry through
tinkering w i t h the price mechanism is not likely to succeed.
it did accomplish this end, it would not be desirable*

Even if

For "basically

the Income disparities evidenced by differences in the marginal re­
turns to resources in one sector of the economy as cospared to another
are symptoms of fundamental maladjustments."

26

The fundamental maladjustment in India is that there are too
many people in agriculture•

Artificial raising of agricultural income

would mean that more people will stay in agriculture and keep It on an
Inefficient level.

While the peasant should be adequately protected

against natural and market hazards, agriculture should not be made un­
duly attractive,

so that people who might otherwise seek avenues of

_j_-----------------------------Johnson, op* cit., p. 113
^Schultz,

26

op* cit.

-----

Johnson, op* cit*, p. 115

202

larg#r income elsewhere ere kept in «n over—manned occupation.
Any system of regulated prices in one part of the economy is
bound to cause unjustified hardship s.

In the case of agricultural

commodities which serve as raw material for industry and supply the
basic needs of consumers generally, this is particularly true.

In

the economic system of today the parts ere so organically related that
tinkering with one part of the economy cannot but have serious reper­
cussions on the rest of the economy.
For all these reasons, it seems desirable to leave the opera­
tion of the market to the automatic forces of supply and demand.

Any

protection that the peasant is given should be provided by direct sub­
sidies or compensatory payments.
If crop insurance is provided, the only time the farmer would
need additional protection would be during periods of general depres­
sion.

For if prices fall as the result of bumper crops, there may be

no need for general alarm.

The greater quantity sold at the lower price

would give about the same income as a higher price and a small crop.
This, of course, would be true of commodities with unit elasticity.
For other commodities the peasant may be e j e c t e d to bear some of the
risk of his undertaking.
But during general depression it would be necessary to provide
compensatory payments to the peasants In order that the production of
necessities be ensured for the whole population.

Besides, the increased

income of the peasants would provide © necessary fillip to economic
2^MiBes, Planned Chaos, (ITew York:
tion, ~LSh(), p. 25

The Foundation for Economic Educa­

203

revival.
As to what the rate of this compensation should be, it ha 3 "been
suggested, that "equity requires that people in each sector of the eco­
no ny should beer their just share of the burden and that none should be
•wholly exenp

r*

Thue Prcfe sscr Schultz reccnoeris 8? per cent of the pre— deore©—
cicn price as the standard by which to calculate the compensatory pay­
ments.

tihnks these payments should be discontinued as soon as the

market price cf the farm products reaches the established percentage of
the pre— depreselon price cn which payments will be based.29
But since some of the costs of the peasants would also go down
as the result of depression prices,

this 83 per cent standard may, in

fact, bring tc the farmer a parity income and not lead to each sector
bearing its just share of the burden.

To achieve that end the percent­

age used might have to be reduced further.
How far such a reduction will impede the other objective of
giving a spur tc industrial activity is another point to consider.
Where the peasantry forms a very large proportion of the total popula­
tion as in India,

this might be very important.

Therefore,

the Issue

should be judged by the pragmati«tic test of recovery, r&ther than that
cf noetic justice.

The compensatory payments therefore, should be fixed

at a poi t where it might be effective in providing the needed spur to
Industrial activity.
The program of compensatory payments has the following advant30
age si"

2 g Ibid., p. 228
29Ibid., p. 229
^Schultz, ou. cit., p.f. 223

204

(a)

It le countflf-cj'cllcal and therefore the gains are no t
the peasants alone, hut are diffused throughout the whole

economy.
vb)

It would not impede the normal working of the nrlce mecha­

nism and would leave market prices free to clear whatever supplies are
marke ted*
(c)

It would prevent distortion of agricultural production

merely because of the depression in another sector of the economy*
However,

the actual administration of this program might pre­

sent serious diff icul tie s in a country like India where a large major­
ity of the people sure small cultivators.

Nevertheless, it seems that

a trial will have to be given to this plan, if only to discover whether
it will w o r k or not*

This is especially true when there does not seem

to be a more suitable alternative.

Improved Marketing*

Another measure which will contribute con­

siderably towards improvement of the Income of the peasant is a change
in the marketing system.
(a)

The present system suffers from three defects.

The peasant

is compelled to sell his produce

iiomedietely

after the harvest to pay

what he owes to the exchequer or

the banker.

At such times there is an over-cupply of produce in the markets, f o r c ­
ing the crlcce down very low.
(b)
duce means
(c)

The absence of impartial gradirg and standardizing of pro­
that the seller is at the mercy of the buyer.
The peasant is usually ignorant of tla true market si tua-

tion and has tc depend upon the seller for market quotations.
:;ow if the flow of produce to the markets could b e regulated
and made ux :e steady by provision of better credit and storage facili­
ties so that the -peasant need not sell during the rush season, his

205

position would "be improved considerably.
koreover, provision of an impartial grading agency, along with
education in the advantages of grading standards should prove effective
in improving the quality of produce and also the Income of the peasant,
A

state agency to "broadcast and publish conditions prevailing

in the different markets, as is done In the United States, would help
the peasant considerably to Improve hie bargaining position.
All the se programs, however, aim at safeguarding the interests
of the peasants from the vagaries of the market economy.

They will not

rai ee the level of the income of the peasants generally,

Therefore,

they will not be of any assistance to the greet majority of those who
have very little surplus to dispose of in the market.

Their well-being

can be improved only by opening avenues for them in industry and/or
providing social security measures in the form of free education, free
medical aid, reduction of taxes, etc.
Credit Policy
In any industry where the source of income is seasonal, rewards
subject to natural hazards, unit of organization unproductive and re­
serves almoet lacking,

the need for credit would always be felt to tide

over the seasonal difficulty or unexpected misfortune.
sources of credit ere not available,

If easy and cheap

the people must perforce resort to

whatever resources may be had. no matter how high the price

they might

have to pay.

have

And a very heavy price they have to pay as we

seen

already.
However,

the provision of easy and cheap credit In Itself does

not solve the problem as the experience of cooperative credit in India

206

demonstrates so well.

In fact cheap credit may encourage unnecessary

borrowing and unless other measures are also undertaken to improve
ability to repay the loan, such credit might land people into greater
difficulties.

Bvus credit policy must be closely related to Income

policies if any satisfactory results are tc be achieved.
not all.

But that is

Because although high income would to some extent ensure

the repayment of the loan, yet we cannot be interested merely in rep H y ­
men t of principal.
If the loans are not put to proper use,

the credit policy and

income policy both may fail to raise the level of living of the people.
Of course, education may be expected to help, but experience has shown
that something more is needed to ensure that credit facilities are
profitably employed.
On the basis of experience gained in India and other countries,
particularly the United States, it seems that the agricultural credit
policy must be directed towards the following objectives!
(a)

mple -procedure:

If

the people are to profit from credit

facilities, complicated procedures should be avoided as they discourage
people from using the facilities.

The mistakes of Taccavi Loans and

Land Improvement Loans should not be repeated.
(b)

Low rate of interest:

The importance of this is too ob­

vious to require any elaborate proof*

The fact that productivity of

capital is usually lower in agriculture than In Industries,

should be

considered In fixing the rate.
(c)

Sufficient supply:

it is very Important that the peasant

should be able to obtain the credit that he needs.

One purpose of

credit is to enable the peasant to meet his emergency needs.

More

207

luportant, it should enable hire to become a. more efficient producer
end thus help maintain himself and his family s.t a fairly B&tisfuctoxy
level of living.

Although there have "been examples of excessive credit,

leading to extravagance and waste, yet generally the tendency has "been
in the opyjosite direction.

For l^ck of enough credit,

the peasant has

been unable to introduce the necessary changes to turn his farm into a
really productive enterprise.

Under these conditions what little cre­

dit is available cannot "be utilized effectively and therefore does not
help the situation v e r y much.

That is why the peasant went hack to the

moneylender when the cooperatives did not supply him enough credit.
(d)

Flexibility of repayment; Past experience shows that often

the gains achieved b y easy and cheap credit are nullified by rigid en­
forcement of the conditions of repayment.
well as o ther countries.

This Is true in India as

Owing to natural calamities and other unfor—

seen circumstances which could not be anticipated and provided against,
the peasant may find himself unable to pay the interest and install­
ments of the principal.

Rigid enforcement of collection results in

foreclosures and other consequences which may cause the peasant to be
in a worse plight than he was when he took the loan.

Although crop

insurance would help insure repayment, under certain circumstances moratoria might be the only way of meeting the situation.
(e)

dance in the use of l o a n ?

Probably the most important

need is the expert guidance in the proper use of credit.

Quite a large

percentage of the peasants who need the loans are the ones who have not
been very successful.

So unless they are provided with expert counsel

as to how much to borrow, and where and how to use the credit,
little likelihood of their profiting from the loan.

there is

208

Any satisfactory credit system, therefore,
requirements.
Uskt

should meet the above

Examining vue cooperative credit system of India in the

these objectives, we find that while It was easy and cheap, it

was not sufficient in amount and the conditions of repayment were too
rigid.

Nor was there any provision for advice and counsel.

There la

no reason why, with state assistance, loans could not he ample or the
conditions of repayment sufficiently flexible.

However, it is doubt­

ful if cooperative societies can make adequate provision for expert
advice.
Moreover, however deeirable it might be to foster cooperation
among the peasantry as a means of education in self-help and democratic
methods,

in the immediate future,

if we are to judge from the past

record of cooperative societies, we should not pin too much faith on
them.

For a few years at least, it seems expedient to encourage private

banks and other lending agencies.
to establish

Perhaps it might be more desirable

State— cum—private banks,

the state element to control

abuse of monopoly position a n d private enterprise to infuse business
efficiency.

Every bank should have on Its staff a well trained expert

in local farming to give real advice to borrowers,, after the manner of
some banks and Insurance companies in the United States.
main purpose of the expert

But since the

will be to help the peasants, a part of

his salary may be paid b y the government.
However,

the American practice of having many diverse agencies

to meet needs of different types of credit should be guarded against.
The keynote of all organizations in a country like India should be
simplicity.

When there are too many agencies offering credit for dif­

ferent purposes, it leads to unnecessary duplication, extra cost and
wastage of time and energy.

The Indian peasant, without any system

209

of cost-accounting, is not likely to reap anything hut confusion from
the distinction between long-term, intermediate and short-term credit,
hanks might he created in each region, according to
the local needs and requirements.

A central berk in the region might

"b® created to finance them, coordinate their policies and exercise
proper supervision over them.
The central hank
private.

may also he either a state hank or state—cum—

Whatever its organization, it would he desirable to have on

its hoard of directors,

representatives of the government, farm organi­

zations and business men.
Land Tax Policy
We have

seen that although the introduction of the sliding

scale system has removed some of the worst features of the land tax
(Land Revenue), yet the tax remains open to two serious objections*
(a)

Ho distinction is made between the tenant and the pea

proprietor in the matter of taxation.
of tax.

Both have to pay the same rate

This results in relatively greater hardship o n the tenant who

also has to p a y the rent*
(h)

The tax rests on the assumption that even the poorest

cultivator makes a profit out of farming, which as we have seen is not
really the case.
minimum level,

While a non-farmer, if his income is below a certain

is exempted from paying the income tax, the farmer has

to pay the land tax regardless of his income or loss.

A large number

of the cultivators derive only "negative income" from farming.
B o t h of these reasons make the lend tax inequitable and contrary
to the ability principle o f taxation.

While the peasant is able to pay

the tax in years of good crops and high orices by stinting on his neces-

210

sitiee,
tax.

in. "bad yeare he has no option but to borrow to pay the land

Therefore,

it has been suggested that the land tax should be

levied on the same principles as the income tax.

^t should urovide

for exemption from the land tax of those peasants whose incomes are
below a certain minimum.

Thie suggestion has been criticized, however,

for various reasons:
(a)

In a country like India where the majority of the people

are small cultivators practicing more or less subsistence farming,

such

an exemption would mean a substantial decrease in the public revenue.
In fact,

it is argued thx t such a step would mean a complete unbalanc­

ing of the budgets of many provinces.
(b)

It is contended that the peasant stands in quite a differ­

ent position from that of persons who derive their income from other
sources than land.

It is claimed that land is the property of the

nation and therefore the peasants must pay for the privilege of using
national property for their private ends.
(c)

Fur thermore, it is asserted that every one should be taxed

to make him realize the duties of citizenship so that he should take
more active interest in public affairs.
Now it is true that Land Revenue forms a major source of income
in many provinces*

But the exemption o f the poor peasants need not

unbalance the budgets if the more prosperous people, who so far have
somehow escaped the taxing authorities, can be made to pay their due
share.

In fact, it is time that some progression should be Introduced

in our land tax system.

Moreover,

taxing the subsistence of the poorer

peasant does not really benefit the exchequer.

For such a situation

leads to the evils of indebtedness, malnutrition and gradual starvation.

211

which, cause the government later to spend huge amounts.

There does not

seem to "be any sense in first taxing the subsistence of the peasants and
later spending millions to see that they do not die of famine and disease.
With regard to the second contention,
must p a y for the privilege of using the land,
he makes a profit out of it.

that the poorest peasant
this would be proper if

But under prevailing conditions, the use

of land is actually a liability for a. considerable number of peasants.
3vea if the argument be accepted unconditionally,
fication for taxing the tenant.
lege of u s i n g the land.

there would be no Justi­

He aiready is paying rent for the privi­

Making hire pay twice for that Questionable

privilege cannot be Justified on any grounds of logic or ethics.
The third argument, that every one should be taxed to stimulate
civic responsibility,
its ostensible object.

sounds plausible.

Actually it does not achieve

Anyway, it does not serve much purpose if the

money thus obtained has to be expended again to improve the lot of those
very people who have been taxed.

Acceptance of the civic responsibility

argument, furthermore, logically would require that all incomes should
be taxed and there should be no exemptions from the income tax.
very doubtful

It is

that those who advocate taxing the poorest peasant, would

accept taxing every citizen no matter what the source of nis income.
Thuc it seems that there is considerable confusion about the
working and purposes of land taxation.

Examination of the above argu­

ments shows thf t those who demand the continuation of the land tax in
the present form do not desire to face facts.

In no progressive country

in the world Is there any example of such a tax.
the most primitive type of tax.^1

^ " a r l Brauer,
pp. 70-72

Karl Brauer calls it

When leaders of India are urging

HLand 'flaxation” , Encyclopedia of Social Sciences, Vol. IX,

212

progress and reform in every sphere of life, it seems rather inconsis­
tent to preserve a tex based on primitive ideas of public finance.
In other countries land taxation takes two forms.

Either it

is a tax on the revenue derived from land or it is e. tax on the capital
▼alue

the land.

The former has the disadvantage of leaving untaxed

that land which yields no current returns, or taxing it insufficiently
in times of rapid appreciation of land values.
Hie land value tax may be based on the capitalized value of the
average annual yield, or the current market value of land.

In the long

run, it seems that the capitalized value of the average annual yield is
a better index of taxable capacity.

The current value of the land may

fluctuate violently owing to extraneous considerations and may have no
relation to the productivity of land.
culties in this procedure.

Firstly,

There are, however,

two diffi­

it is often difficult to ascertain

the net yield because of the natural hazards which accompany farming.
Secondly,

the selection of the proper rate of interest for capitaliza­

tion is usually not an easy matter.

However, in India where the rate

of interest does not fluctuate so much it may not be a very serious
difficulty.

An income basis of land taxation can be administered fairly

and w i t h o u t serious difficulty.
Whatever system may be finally adopted, it seems necessary to
provide for exemptions below a certain income level.

Should this mean

a considerable strain on the budget, some other way must be found to
balance the budget.

CHAPTER XII
SUMMARY AND CONCLUSIONS
Despite her rich vegetable and. mineral resources, India
suffers f r o m grinding poverty.
lowest,

Her per capita income is one of the

and her death rate one of the highest in the world.

With

about 87 per cent of her people living in the villages, and directly
or indirectly dependent on agriculture,
economy.

The causes of her poverty,

her salvation, l i e there*
in order,

she has primarily a rural

as well as the possibilities of

If India is able to put her rural economy

most o f her trouble will disappear*

The causes of the ills of rural economy in India are of two
types.

One,

those which are found in every predominantly agricul­

tural economy.

For example, drouth,

hail, floods, blight and pests

may bring failure of crops resulting in starvation and famine.

Over

these factors man has little control although recently, as the result
of improvements in transportation,
considerably reduced.
hazards,

the severity of famines has been

Where large areas are very susceptible to natural

this difficulty may be mitigated by crop insurance.
The second type of causes responsible for the poverty of the

people includes those related to historical factors and conditions
peculiar to the country.

The following are the more important of these.

213

zib

Pressure of P opulation.

The average density of popula­

tion is 2^7 per square mile, considerably- lower than that in England
and other European countries.

But in view of the low level of eco­

nomic development and the lack of effective utilization of resources,
this density results in an over-population situation that is pretty
grim.

13ie average span of life is one of the lowest, while infant

mortality is one of the highest in the world.

The standard of nutri­

tion is anything hut satisfactory.
(b)

Small and Scattered Holdings.

The unit of farming is

not only small, but also qolit into small parcels scattered all over
the village area.

Eighty per cent of the holdings are ten acres or

less, and about 60 per cent are under five acres.

These holdings be­

come smaller and smaller with every generation as the result of the
law of inheritance which demands equal distribution of land among all
the heirs.

This situation, coupled w i t h the lack of capital owing to

the poverty of the peasant, makes farming inefficient and uneconomical.
(c) Inefficient Farming. The methods of cultivation are mostly
primitive, with the result that crop yields compare very unfavorably
with other countries.

Farmyard manure commonly is used as fuel for

want of other fuel, while bone meal is precluded because of religious
sentiment.

Artificial fertilizers ere almost unknown.

ant knows about them,
(d)

Where the peas­

they are beyond his means.

Improper Utilization of Land.

In addition to the small

and scattered holdings which make farming Inefficient,

there is the

system of land tenure which puts a premium on inefficiency.

More than

two— thirds of the cultivators are tenants of the rentier type of land­
lords, who do not take m u c h interest in farming.

The tenants have

neither the funds nor the desire to make permanent improvements,

the

215

'benefits o f which they may not enjoy.

The landlord who ha*the capital

for such improvements usually is not Interested.
land use.

This results in poor

Moreover, large areas are lost to cultivation as the result

0 * soil erosion and water-logging.

These have assumed alarming propor­

tions in some areas.
(®)

Inefficient Marketing. The peasant usually has to sell his

produce to the village Bania.

As a result of his monopolistic position

and the ignorance of the peasant,

the Bania is able to dictate prices.

Even i n the town market the odds are against the peasant.
lack o f impartial grading and storage facilities,
accept wha t e v e r price is offered to him.
levying various unjust charges,
as over— weighing,

the peasant has to

furthermore, in addition to

the traders practice various frauds such

settling of prices under cover, and the same men

acting as the agent for both the seller and buyer.
they are,

Owing to the

With conditions as

the peasant usually does not get the full value of his pro­

duce.
(f)

Heavy and Inequitable Taxation.

The burden of the land

tax not only is generally heavy, but it also is inequitable.

In the

case of the landlords the tax generally takes only a small fraction of
net income, while the tax on the tenants may absorb the whole of the
net income o r even exceed it.
(g )

Lack o f Credit Jacilitieg. B y and large,

lender is the only source of credit.
Once in debt,

the village money­

Such credit has proved very costly.

the peasant is likely to remain in debt.

The moneylender

not only charges a high rate of interest, but has a tendency to exploit
the uneducated peasant through arithmetical jugglery.
(L)

Too

Animals.

India has to support one-fourth of the

world's livestock as well as one-fifth of the total human population.

216
To aggravate the situation, a large number of these animals are old
an d useless,
ent.

while a majority of the remaining are weak and ineffici­

Furthermore,

the number of animals is the largest where the

holdings are the smallest.
( )

Lack of Education.

In the absence of education the

p easant remains ignorant of the way p, and the means through which he
could improve his farming efficiency.
him conservative,

The lack of education keeps

superstitious and a believer in Kismet or Fate.

He

accepts the natural course of events as sacred and makes very little
effort to improve his lot.

A slave of custom,

tradition and pseudo-

religion, he over— spends on various social and religious celebrations
and gets into difficulties.

Various efforts have been made to deal wi th some of these
problems.

For example,

enacted to helu
compact plot.

the Consolidation of Holdings Act has been

the landowners combine their separate parcels into one
Better methods o f farming have been publicized through

the Departments of Agriculture, Cooperation and Sural Reconstruction.
Tenancy laws have been enacted to deal with some of the glaring evils
of tenant farming, as well as to insure better utilization of tne land.
Through the Land Reclamation Department efforts have been made to pre­
vent soil erosion and water-logging.

Marketing laws have been passed

to provide better control over markets and prevent current abuses.
Through the introduction of a sliding scale system in land taxation,
attempts have been made to make the land tax elastic as well as more
equitable.

Cooperative credit societies have been formed to supply

cheap and easy credit to the peasant.

In certain areas c j a y r ^ c r y

217

p r i m a r y education either has teen introduced or i B being proposed.
Research has also teen going on to improve the "breeds of* animals,
"both inilch. and draught.
Yet. despite the f act that most of these measures have "been
in operation for ® considerable period of time, not much headway has
been made.

There are many explanations.

foreign government, lack of

proper leadership and education, unfriendly nature and the social
m i l i e u have bean blamed for lack of progress.
reason

Rut the more important

seems to be that most of these measures have been in the nature

of palliatives or temporary expedients,

and therefore have failed to

remove the basic weaknesses of the economy.

Furthermore.,

the fact

that no substantial results can be obtained without concerted and co­
ordinated a ttack on all

the different aspect* of life, seems to have

be e n overlooked.
Thus it would seem that an affective program must not be hap­
hazard or sporadic, but must aim at removing the basic weaknesses
which ere responsible for

the degrading poverty in rural India.

In

this connection there s e e m to be two alternative courses of action,
vie.

(a) a conn letely planned. econo:.y end (b) regulated laissez-faire.

The former implies comprehensive.centralized, bureaucratic control
ever the w h o l e economic

system.

This usually results in many abuses

and cannot be accepted b y a democratic society which price* the free­
do m a n d independence of its members.
to be regulated laissez-faire.

Therefore, the only choice seems

Complete laissez-faire cannot be accepted,

for as it actually works in life.it has the tendency to breed monopoly
power anc bring about violent business fluctuations.
In the matter of

the regulation of the economy, however,

it

must be remembered that power has the tendency to accrete on itself and

218

■bring about abuses.

So it would be desirable not to add economic

p o w e r to the political power which the state already wields.

Thus

it would b e well to entrust the regulation of economic life to an
independent non-governmental coracle si on.
mission would b e

The function of this com­

to coordinate and integrate the working of the dif­

ferent sectors of the economy, generally through advisory measures.
In the event of an impending crisis, however,

the commission will

have the power to recommend compulsory measures which the parliament
might adopt*
The major line of attack on the pert of the commission would
be through long-term policies which will
private as well as state enterprises.

serve as pointers to the

These long-term policies, of

necessity, must deal with the basic problems of the economy.
The basic problems of rural economy that require solution are,
(a) lack o f education,
trialize ticn,

(b) pressure of population,

(c) lack of indus­

(d) improper and inadequate use of lend, and (e) low

and fluctuating returns.
Without education

the people not only do not understand the

causes o f their troubles, b u t also cannot adopt any effective measures
to deal w i t h them.
progress.

Education seems to be a basic requirement for all

In view of the present situation w h ere only 12 per cent of

the people can r e a d or write,

nothing snort of a crusade will serve

to bring about tangible results,
be well
which,
tions.

spent.

looney and effort on education will

Lese money would need to be spent on other things

in the absence of general education, assume tremendous propor­
Since war on illiteracy is of as vital importance as war

against an aggressor,

the crusade against ignorance may be financed

in the same way as war.

For a couple of years it might be necessary

219

to draft college graduate a end under-graduate sin the same way as some
governments draft young men for compulsory military training.

Tb

develop an adult education program it may he possible to requisition
the services of teachers during the long vacations which may he ar­
ranged to synchronize w i t h the sleek seasons of farming.

Building of

an adequate agricultural extension service would he very necessary.
For s f e w years the quality of education may have to he sacrificed in
order to educate the masses.

Therefore,

some temporary relaxations of

reqvirenients in the matter of "buildings,
sonnel will he necessary.
needed.

equipment, and teaching per­

More emphasis on the education of women 1 b

For upon them depends largely the bringing up of the future

generatio n s.
A f t e r education,
growth o f population.
assure

the next important thing is to check the

For no efforts at improving the situation can

significant and lasting results, if increased productivity is

more than neutralized by the rcpid growth of population.

It seems that

along with education, a crusade is necessary for a birth control move­
ment.

Educational machinery can he used for this purpose.

ledge alone would not he

sufficient.

Equipment and facilities will

have to he provided on an adequate scale.
belief,

Bu t know­

Contrary to the general

Indian tradition is not opposed to birth restrictions.

Erahma-

charya, volun t a r y abortions, prolonged lactation, infanticide and periodic
taboos o n sexual intercourse have been quite common.
need of more positive measures.
and encourage urbanization.

But there is a

It is necessary to prohibit polygyny

Compulsory

education and social security

measures will also discourage people from having too many children.
The former would prevent the child from working and he would no longer
be a source of income.

Social security measures will make the aged

220

p a r e n t s l e s s dependent o n their children and therefore reduce the
desire or

the necessity o f having many children.

of m arriage

Raising the age

seems to he p sychologically and physiologicelly unde­

sirable.
Industrialization is essential from the point of view of
natio n a l defence and a b a l a n c e d economy.
industry

seems to be unwise.

But the move to ruralize

Such village industries are likely to

be l e e s efficient and therefore are not likely to stand the competi­
tion of l a r g e scale industry.

Moreover, it will not solve the prob­

lem of over-crowded rural areas.

The assumption that rural life is

i n h e r e n t l y beautiful is o p e n to question.
large

However, while building up

scale industries it will be necessary to prevent the evils

asso c i a t e d w i t h industrialization i n the past.

Fortunately, with

improvement and advance in technology this will be possible.
It will be necessary to guard against

the abuses of monopoly as well

as the d a n g e r s of b u siness depressions.
Impera tive

Still,

For this purpose it will be

to provide for s e e intelligent control and checks o n the

g r o w t h of i n d u s t r y .

This m a y be achieved through a central commission,

repre s entative of different interests, which will try to coordinate
and integrate different sectors of the economy.

To avoid the unhealthy

state control over the w h o l e economic life of the country,

such a com­

mission will have to be free from governmental control.
To ensure better 1 and utilization it seems necessary to bring
about more far reaching changes in the systems of farming as well as
systems of l a n d tenure.

However, e v e r y one of the various proposals,

such as collective farming, cooperative cultivation.

Joint farming and

managerial farming,

Before any of

have their merits and demerits.

221

^kes©
basis,

a^ 0P^®^ on ®- large scale it should "be tested, on an experimental
A revolutionary change should not be introduced before we know

exactly what the new system has to offer.
under all
its worth.

The new system must be tested

the limits tions and Inperf ec tions of village life to prove
It is no UBe making the experiment under ideal conditions

for finally it is the average or even below average conditions that have
to be tackled.

Perhaps,

as the result of the actual experiments, it may

be found, desirable to have different systems in different parts o f tt©
country.

It will not be desirable to liquidate the landlord system

until we are clear as to what would b e the more desirable substitute,
A change in the law of inheritance might wait similarly until there is
a consensus about the new system of farming that might be adopted.

In

the meanwhile all efforts will have to be concentrated on increased pro­
ductivity through better farming.

The peasant can b e educated

in this

respect through a well— crganized extension service.
To
program

stabilize returns to the peasant, some form of crop insurence

should be provided to counteract natural hazards, at least in

those areas which are particularly susceptible.

Furthermore, Jt is es­

sential to improve marketing conditions through provisions for better
price information, impartial grading and standardization of the produce,
end adequate warehouse and storage facilities.

Stabilization Qj. the in­

come of the peasant through support or forward prices does not seem
either feasible or desirable.

However,

in times of general depression,

subsidies to peasants may be necessary to assure the production of the
necessities of life and also to provide a fillip to economic revival.
The needs of credit will have to be met through a satisfactory statecum-private banking

system.

However,

what the peasant needs more than

cred i t is proper advice a n d counsel as to how to make the best use of

2 2 2

credit.

The lend tax needs to be made more flexible and equl table.

For

purpose exemption may be granted to those peasants whose incomes
are b e l o w a certain minimum.

Loss to the treasury may be reimbursed

by making the tax structure more progressive.
prosperous section, which bo far has

It is time that the more

successfully evaded the exchequer,

be asked to contribute its due share to the cost of government.
It will be seen that this study does not offer any magical or
revolutionary cure for the poverty
end revolutionary changes seldom

o f

a c h i e v e

or propose,

to achieve miracles seem

India would

d o

economy on more

rural India.

t o

t h e i

It is because sudden

r purpose.

Those who hope,

overlook the lessons of hietory.

well to profit by the experience of othere and build her
sure or stable

f o o t i n g .

O f

course that will take time.

Pu t it seems that on the whole evolutionary progress has more in its
favor than the revolutionary methods.

£ ISL10 GKAPHY
Ackerman. J. and Harris, Marshall.
Family Farm Policy. Chicago:
University of Chicago P r e s s, I'skf
-------Addison, Lord.
1939
Agarw&la,

a

. N.

A Policy for British Agriculture. London;

Pesslml sic in Planning.

Allahabad;

^ Critique of Industrialists P l a n , Benares ;
and Ero s. , l^Ull______________Others.
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